Amid the global financial crisis, China has managed to reach the position of the world’s number one exporter. While much of the world is still struggling to come out of the crisis, their economy continues to grow. As a result, China is receiving disapproval from both the West and other developing countries in regards to how they have been able to achieve their top ranking. In addition to discontenting many of its trade allies, China’s aggressive efforts to further their exporting power are causing economic troubles within its own borders. It is crucial for the American economy that U.S. officials continue to pressure China to revalue its currency.
China was in an advantageous position to deal with the global recession thanks to its lower-price products. As the world was hit by the recession, many consumers looked to those cheaper goods. Even as countries are recovering, consumers across the globe have altered their tendencies. Many people lost much of their wealth and have a changed perspective on their consumption. Consequently, China’s exporters have been given a prime opportunity to benefit. Goods that may have seemed essential in the past no longer have the same allure and cheaper products available from Chinese manufacturers have become increasingly more attractive. Already possessing the power of cheaper goods, which have proven to be appealing during the recession, the Chinese government has made concerted efforts to maintain a cheap currency. To achieve this, China made the decision to peg its currency to the U.S. dollar. The U.S. dollar, and accordingly the Chinese yuan, was greatly weakened against other currencies last year. As a result, China’s factories have gained additional price advantages over manufacturers in other countries allowing Chinese exporters to thrive in a weak trade environment.
Although the strategy of sustaining a