RMB Appreciated And Dollar Standard

From the second half of the year 2002,US dollar was going down and down. With the Chinese exchange-rate policy of pegging the Yuan to the dollar that leading RMB depreciated. And then the Chinese surplus became larger and larger. In the May of 2003,the American Treasury Secretary John snow said"Chinese government should think about widing the fluctuation area of RMB". It was first time that US gave its opinion to the question of RMB revalued. The reason was that Chinese exchange-rate policy help they to get unequal dominant. It was the root of the low cost of exports and the unbalance of US-China trade. When time came to 2005, the require of RMB revalued was more and more. The April 6th, the US senate pass a motion which was that if China does not appreciate its Yuan in 6 months, US would levy 27.5% tariff to all the Chinese goods.July 21st ,2005, PBOC announced that abandoned the policy of pegging the Yuan to the dollar, and change to the policy of pegging to currency basket. The exchange-rate jump to 8.11 in the day, and then went higher and higher. But US had not stop, in September, John Snow directly require China to wide the fluctuation area of RMB and push trade freedom; in November, President Bush talked about RMB revalued with President Hu Jintao in China. Even now falling down to the crisis, US still remember to ask China to revalued its currency.The aim of this research is that finding the nature of RMB, clearing the facts and getting the root causes of US require to revalue RMB.When China open the gate in later of 1970s, it came into a more unstable and more vertiginous international system. In this system, the dollar is the standard, and foreign exchange to the whole world. China used its low labor cost and lots of preferential policies attracted the foreign capital. Basic on processing trade, export made a lot of US dollar. With the trend went strung, trade surplus(China to US)went wider and wider, and saving of a huge mount of the useless dollar. They only can be use to up people's windy confidence. During this process, the only thing that China got is processing fee and job opportunities. We never saw the profits, we could not get through our destiny, economic development dependent on others, and resources depletion, environmental pollution. This type of improve economy is full of risks, this type of employment is really unstable. Today's condition is the best evidence of this. Into the 21centory, unbalance of china-us trade became worse. But Chinese government did not give enough concern to this problem. They believed that Chinese economy was in good condition which was hard-won, so we should go on. But regrettably, the final result is that we fell into a trap. Because of the deeply dependent on US market, when Americans do not buy Chinese goods, our economy could not reach the aim we made every year. So, we were always in the weak side during the international environment and face to the press from US.Cause of the us dollar, trade deficit, exchange-rate of pegging to the dollar, export-oriented economy, processing trade, manufacturing extrusion, unemployment…all of these are nature things. The manufacturing extrusion of US leaded to both employment and welfare decrease. And cause of the us democracy, interests groups took these problems as excuses to press the congress, finally by passing the bills to press the government require china to revalue its RMB. As this reason, the require of RMB revalued is nothing more than being pressed domestic politic factors.The intervention in RMB exchange rate is depended on American interests and American domestic politic elements. And the us attitude to RMB is not the same forever. Cause of the rapidly changing of international situation, American interests and American domestic contradictions will change with it. What's more, different times there will be different degree of the two factors which effecting the US attitude to RMB. Sometime American interests be dominant, sometime the other.It is not allowed that there is a China which threat to the US status. That is the constant American interest. Voters opinions whether be manipulated or not and congress presses whether be manipulated or not are the domestic politic factors that both presidential nominees and government have to compromise. These are the really basic reasons that determine the us attitude to RMB.After knowing these, we can become more active and more confident.The innovations of this research include that combining research-method of economic and politic method, it is different between the basic reason of RMB revalued and the reason of us requiring RMB revalued, the so-called export-oriented economy may not serve purpose in china…these methods and opinions are new, specially on the research of RMB revalued. Talking about the status in the academic circle, I do not dare to think about it. The road is long, and the future is waiting for me, so, I have to go, go, and go.