The Chinese Government spends several hundred of billions of dollars each year to peg its currency at a near fixed rate to the Dollar. A fixed and devaluated value of the Chinese currency will make Chinese exports extremely competitive in foreign markets and taken away sales from manufacturers in the United States and other countries.
However, after some pressure from some developed countries especially the US, the Chinese Government is now preparing to announce that it will allow its currency ( the renminbi or yuan) to strengthen slightly and vary more from day to day. This move would help ease tension with the Obama administration on the United States’ huge trade deficit with China.
A Moral Hard Case can be sense here, considering China as The Agent. China is faced with a good moral reason to peg its currency and a good moral reason to allow its currency to fluctuate freely.
• Is it morally permissible for China to allow its currency (the renminbi or yuan) to strengthen slightly and vary more from day to day? Considering this move will reduce their export competitive advantage that will eventually have a negative effect on the well being of its people but improve the welfare and the declining export economy of other countries especially the US.
In my opinion China is not being economically fair to other countries by pegging its currency: thus violating the positive moral principle of fairness and justice. China should allow their currency to fluctuate freely and allow the forces of the market which is considered as the most effective economic tool (Market Efficiency Theory) take control. On the other hand, China has a moral obligation to provide for the well being of its citizens. China can insist on pegging its currency based on the fact that it gives them an export competitive advantage to compete with the more advanced countries (The US and The EU). This advantage is reflected on the well being of its people via employments and other amenities.
U442236
2 comments:
I think that it is difficult to come to a conclusion about this. If you make use of a moral theory such as utilitarianism one could easily arrive at the conclusion that (according to this aggregate moral theory) the inhabitants of the world would be better off without the Chinese pegging.
However, the special duty that the Chinese government has to its own citizens should not be neglected. Maybe it is better for the world as a whole if the Chinese do not peg their currency but on the other hand they cannot drive their own people into the poverty. Additionally, they reason that a fast appreciation of the Chinese currencies may cause the economy of China to collapse. This would, after all, not benefit the world its economy. This is probably why they choose to slowly let their currencies appreciate; it is the best solution for all.
U1236311 / ANR169300
Chinese government these years suffers much pressure from some developed countries about RMB fixed and devaluated problem, especially the US, which is one of the largest export countries in the world. US is willing to import Chinese manufacture because their low cost of labor and material. The steady the exchange rate and currency make Chinese exports competitive to other countries, but on the other hand, other import countries are not happy with that because they will pay steady money to the exports with dollar depreciating these years. Chinese government is morally responsible for the currency steady in their own country. China is a developing country, their economy systems in some aspects are not complete until now, and they need make their currency and exchange rate steady to develop their country. However, on the pressure of strong countries, Chinese government starts to think about change their currency policy to meet with the international needs. China as one of the biggest countries in the world, it also has duty to make international market steady and profitable.
499432
Post a Comment