Is chinese yuan [chinese currency] reposnible for this in any way?
other factors?
2007-01-10 06:54:21 · 8 answers · asked by vek 2 in Social Science ➔ Economics
lots of u are of the view that chinese goods hv low quality and low wages. AS far as quality is concerned, then chinese goods hv a reasonably good quality and as far as low wages are concerned, i dont think any country can achieve more than 9% growth rate for more than 25 yrs ONLY by exploiting certain section of people!
what do u say? oh throw some gyaan (knowledge) on yuan vs. dollar and what cud be the other factors?
2007-01-10 07:11:58 · update #1
There are so many different right answers to this question it’s not even funny. No really it’s not funny. So I’ll just tell you the most interesting one. Sorry, but it will be entertaining. The reason why their economy grew so quickly is because their goods are so cheap. Their goods are cheap because thier exchange rate is really low. There exchange rate is really low because they’re cheaters.
You see china knows it can not ship really large goods over sea’s to the US because the cost of shipping things that are bulk and heavy cost a lot of money, and we could just make it ourselves. So, what they do is they make small things like shirt and electronics that don’t take up a lot of room. This way they can spread the cost of shipping over a larger number of customers so each individual customer doesn’t feel the bit of shipping.
This would all come to an end if the exchange rate appreciated thereby making it more expense to buy renminbi (china’s currency). You see you have to buy china’s currency if you want to buy china’s goods. If the currency appreciates it indirectly makes china’s goods more expensive. What they do to make their exchange rate from appreciating is they large quantities of US bonds. By buying large quantities of US bonds they are able to increases their supply of international reserves of dollars. Whenever the fixed exchange rate looks like it’s going to move, they simple buy less or buy more US bonds. Remember that the exchange rate is fixed lower that ours. So there you have it…
But now I they changed to a limited flexable exchage rate because they started catching to much heat for that.
2007-01-10 07:59:47 · answer #1 · answered by Mr. DC Economist 5 · 0⤊ 0⤋
I am a Chinese that lives in Beijing and I think that the reson we are able to manufacture products at cheap price is because my people work hard and they are willing to get lower salaries.
By the way, MollyMormon, who told you all those rubbish? My goverment DON'T pay people with rice. And China is now under a free market system.
2007-01-11 00:56:49 · answer #2 · answered by chankljp 6 · 0⤊ 0⤋
The yuan IS artificially low, but the major reason for the low prices is the incredibly LOW, LOW WAGES.
2007-01-10 07:03:55 · answer #3 · answered by backinbowl 6 · 0⤊ 0⤋
Low pay, high volume.
Fun fact: 80% of the products sold at Walmart are made in China.
2007-01-10 07:02:27 · answer #4 · answered by Anonymous · 0⤊ 0⤋
They pay their people change and rice. Its a communist country. The people are not meant to flourish and have their own lives. They are slaves.
That is why it sickens me when I am forced to buy products made there becuae we dont make them here any more. You are only helping to support the Chinese army who will one day invade our butts.
There is a site that I know of www.madeinamerica.com something like that...
2007-01-10 06:59:47 · answer #5 · answered by SunValleyLife 4 · 0⤊ 0⤋
Mostly comes down to the fact of much lower salaries.
2007-01-10 06:58:46 · answer #6 · answered by Anonymous · 0⤊ 0⤋
I guess it's the quality that makes it cheap.
2007-01-10 07:00:38 · answer #7 · answered by Anonymous · 0⤊ 0⤋
workers are paid at a much lower rate.
2007-01-10 06:58:19 · answer #8 · answered by Biaggio 2 · 0⤊ 0⤋