Chinese managed Float-format

Summary : One of the ways China's economic rise was accomplished was by pegging its currency, the Chinese yuan to the United States dollar and instituting trading arrangements between the two nations.
One of the arguments yuan against dollar is that it appears that China benefits more than the U.S. Manufacturers in the U.S. often put pressure on Congress to lobby China to appreciate its currency, citing the difficulty of competing against artificially cheap Chinese goods as a reason for change. Year after year, new bills are introduced by Congress demanding that China appreciate its currency so the yuan and dollar balance is more equalized. They claim the Chinese are protecting their trade superiority and the U.S. is forced to pay the price. Problem detecting : The problem from China's perspective is that appreciating the yuan could mean less foreign investment in China, deflation, lower wages and unemployment. Fewer exports will also diminish China's supply of dollars for investment, both inside and outside the country. China argues that the currency peg is meant to foster economic stability and abandoning the peg could result in an economic crisis.
Some benefits of an undervalued yuan for the U.S. include lower prices for consumers, lower inflationary pressure and lower input prices for U.S. manufactures that use Chinese inputs. Alternatively, an undervalued yuan hurts U.S. industries that compete with cheap Chinese goods, thus hurting production and employment in the U.S. Also, a low yuan makes U.S. exports more expensive to Chinese consumers and reduces exports to China.

As of 2009, the yuan and dollar mid-point was pegged at 6.8339. This means that one U.S. dollar = 6.8339 Chinese yuan. As with any commodity, if the demand for yuan increases or decreases, the central bank has to respond accordingly by supplying or