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She is comparing the manufacturing output of the U.S. and China in dollars, not actual quantity of stuff. But China is engaging in a policy of actively devalui
by bokonist 17y ago
She is comparing the manufacturing output of the U.S. and China in dollars, not actual quantity of stuff. But China is engaging in a policy of actively devaluing the yuan relative to the dollar precisely in order to prop up manufacturing and exports. Thus the quantity of China's output may actually be considerably greater than America's, but the price of the output may be lower due to China's weak currency policy.
- sliverstorm 17y agoThe author's first name is "Helen". I think "He" is a little inaccurate ;) Sorry to nit-pick
- Perceval 17y agoTrue, but on the flip side, demand for China's goods might be significantly lower if they weren't manipulating their currency. If their goods had a higher valuation from being priced in a more valuable yuan, the demand would probably fall. I guess we have to wonder whether it's politically more important for China to sell high volume/low price or eventually more to medium volume/medium price.
- fnid2 17y agoThat's definitely true. I wonder what will happen when China releases the Yuan and they are able to compete on a wealth scale with the U.S. Inflation is going to increase dramatically for U.S. consumers and many of the products we use today will become out of reach for even the middle class. We'll be riding bikes and they'll be driving cars.