Conspiracy Behind Exchange Rate

    More and more Americans are losing jobs and houses during the sub prime mortgage crisis, which still playing a role in discouraging the U.S. economy. Normal American think that China setting exchange rate is the primary reason for depression. However, the real fact behind the event that America is enforcing China to raise exchange rate is eager to open China's Financial Markets.

    In 2011, the U.S. trade with China was $272 billion. This was down a bit from the year before, when the trade deficit was $273 billion. Both were higher than any prior year. Chinese government sets its exchange rate lower than dollar.U.S. manufacturing, as measured by the number of jobs, declined 34% between 1998 and 2010. Rising unemployment in the labor market is still a big problem for both the normal American and the U.S. government. Moreover, the president selection is coming, so the present President Obama has to do something to improve his public support rate.

   

    More and more normal American wants the U.S government to enforce China to allow the yuan to rise. As a result, the U.S. government got a idea. Since America can not make the purpose into reality, they want to open the financial market to the companies to Wall Street.

    The political election is coming. The common people in America think that China setting exchange rate results in American unemployment. The democratic party wants to win the president election, so they seemingly meet the requirement of the common people.

     There are more and more economists saying that they did a lot of researches on the exchange rate of Chinese to America. China setting their exchange rate has nothing to do with the American economy, which greatly declined in 80s. China setting exchange rate has nothing to do with the manufacturing in America.

   
    However, some people says that As long as the yuan's value is lower than the dollar, China's goods are cheaper in comparison. That is true, but this is not the real reason for the problem. China's economy is the third largest in the world. China has more people than any other country. It has to divide this production up among 1.3 trillion residents. In other words, its GDP per capita is $7,600. That is a very low income for Chinese.

   
    In conclusion, U.S. government can not raise the Chinese exchange rate as expected, so the real reason why America tries to enforce China to raise exchange rate is eager to open China's Financial Markets. Opening the financial market can make the same great profit in a alternative way.

Sources:

《New Imperialism in China １》     By Larry H. P. Lang　2010-1-1 　ISBN：9787506037648

《New Imperialism in China ２》  By Larry H. P. Lang　2010-5-1 　ISBN：9787506038867

　"U.S. Trade Deficit with China"     　By Kimberly Amadeo　Article updated January 26, 2012　
　　http://useconomy.about.com/od/tradepolicy/p/us-china-trade.htm

Ｎｏｔｅ：Larry H. P. Lang　

Prof. Lang got both his Master and Ph.D. degrees in Finance from the Wharton School, University of Pennsylvania in 1986. He had been lecturer at the Wharton School of Business, University of Pennsylvania and professor of Finance at Graduate School of Business, Michigan State University, the College of Business, Ohio State University, the Stern School of Business, New York University and Visiting Professor of Finance at Graduate School of Business, the University of Chicago. Now he is Chair Professor of Finance, the Faculty of Business Administration, the Chinese University of Hong Kong.


From 1994 to 1996 he was Partner of GITIC-Lehman Infrastructure Fund, Lehman Brothers. From 1998 to 2000 he worked as Consultant on Corporate Governance Projects to World Bank, Washington, D.C. After that he was Consultant on WTO/Banking Issues to Organization of Economic Cooperation and Development (OECD).


Now Prof. Lang is Consultant on Corporate Governance to China Shenzhen Stock Exchange Hong Kong Government.

My Next Steps

1. adding some sources

2.continuing  to add my background information

Draft 1

                                                Conspiracy Behind Exchange Rate

 I. Introduction    

   

    More and more Americans are losing jobs and houses during the sub-prime mortgage crisis, which still playing a role in discouraging the U.S. economy. Normal American think that China setting exchange rate is the primary reason for depression. However, the real fact behind the event that America is enforcing China to raise exchange rate is eager to open China's Financial Markets.      

II. Background Information

   
    In 2011, the U.S. trade with China was $272 billion. This was down a bit from the year before, when the trade deficit was $273 billion. Both were higher than any prior year. Chinese government sets its exchange rate lower than dollar.U.S. manufacturing, as measured by the number of jobs, declined 34% between 1998 and 2010. Rising unemployment in the labor market is still a big problem for both the normal Americans and the U.S. government. Moreover, the president selection is coming, so the present President Obama has to do something to improve his public support rate.

III. Supportive Evidence

   
    More and more normal Americans wants the U.S government to enforce China to allow the yuan to rise. America seemingly wants China to allow the yuan to rise 21%-40%, but China would not do that because China did a yuan test that if China allowed the yuan to rise 3%-5%, all the factories in China would go bankrupt without any profits. China knows the situation. Of course, the White House also know this. As a result, the U.S. government got an idea. Since America can not make the purpose into reality, they want to open the financial market to the companies to Wall Street.
   
    The political election is coming. The common people in America think that China setting exchange rate results in American unemployment. The democratic party wants to win the president election, so they seemingly meet the requirement of the common people.

    There are more and more economists saying that they did a lot of researches on the exchange rate of Chinese to America. China setting their exchange rate has nothing to do with the American economy, which greatly declined in 80s.