Why China’s government wants to keep its currency low?
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This entry was posted on Tuesday, June 8th, 2010 at 2:23 am and is filed under Currency Trading. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
June 8th, 2010 at 2:23 am
By keeping its currency low it reduces the cost of purchasing that currency from abroad, this makes its goods cheaper in foreign countries as its goods are priced in its own currency.
This leads to increasing exports which drives up production and hence job creation, this helps reduce unemployment and generally increases the standard of living for its population. The improving position of its people economically is one of the major factors that reduce calls for democratization and so allow the government to maintain its authority.