'The Trouble with China'

from politicalaffairs..........

"What is the trouble with China? It depends on where you are looking from. As economist Paul Krugmannoted in January, the visit of China’s president Hu Jintao to the US triggered a rash of articles trying to make sense of “growing Chinese economic might.” The general drift and tone of the literature in the US is that China’s rapid development is 1) a threat to the US, including to American workers, 2) so rapid that it can not be sustained at its current pace, and 3) a threat to the global environment. A review of recent literature strongly suggests that how our government deals with China and its new status on the world stage remains uncertain and of great interest to American workers.
 
For instance, on point 1, it has been argued that China’s “manipulation” and “undervaluing” of its currency (the renminbi) takes jobs from American workers. According to the Economic Policy Institute (EPI), if China allowed its currency to rise to its “real” or “natural level” the cost of Chinese exports to the US would increase enough to create over 2 million jobs in the US and reduce our unemployment rate by a full percentage point. Krugman supports this argument contending that China’s policy “seriously damages the rest of the world” because China “by engineering an unwarranted trade surplus, is in effect imposing an anti-stimulus on these [the world’s large] economies, which they can’t offset”..............READ MORE