In a speech to European Union, China Premier said that a big change in the value of the yuan can cause " social and economic turbulence " in China. Mr Wen also argued that if China accepted to let it yuan rise many exporting companies will have to close down. The International Monetary Fund chairman Dominique Strauss-Kahn warned that :"There is clearly 
the idea beginning to circulate that currencies can be used as a policy weapon," he said in an interview with the Financial Times. "Translated into action, such an idea would represent a very serious problem for the recovery of the "Global Economy".
It's clear that the yuan devaluation policy that China is using will not be helping solving the issue of unemployment in a short run in USA and European Union but in the long run this can help.
First of all an appreciation of the yuan will reduce China exportation and cause an increasing in the unemployment rate in China, but this can be corrected by "Dumping" or by decreasing the internal salary level. These two solutions also have their draw back, but if China does not let its currency rise, China will face taxes barrier as the one that the US congress has presented this summer. This can also cause more problems to the world economy and to the Chines economy itself.
The currency policy weapon that IMF is worried about is a current practice now, one example is the reaction of Japan last month and unfortunately we are now in the middle of a struggle for recovery. This is a war that will help saving or creating some more jobs in the short run but this will lead to a decrease of competitiveness in the long run. Moreover, the use of the lower level of the yuan is affecting the equilibrium of the world economy and the consequences of this action would be another crisis if China does not try to adjust its currency to its right level.
This is the right time for the WTO: World Trade Organization to show us what they can do and if its an efficient Organization. The problem is a complex issue and it requires concession from China and also from western economies.
ERIC ROLEX JOSEPH
B.A
http://www.bbc.co.uk/news/business-11488501
the idea beginning to circulate that currencies can be used as a policy weapon," he said in an interview with the Financial Times. "Translated into action, such an idea would represent a very serious problem for the recovery of the "Global Economy".It's clear that the yuan devaluation policy that China is using will not be helping solving the issue of unemployment in a short run in USA and European Union but in the long run this can help.
First of all an appreciation of the yuan will reduce China exportation and cause an increasing in the unemployment rate in China, but this can be corrected by "Dumping" or by decreasing the internal salary level. These two solutions also have their draw back, but if China does not let its currency rise, China will face taxes barrier as the one that the US congress has presented this summer. This can also cause more problems to the world economy and to the Chines economy itself.
The currency policy weapon that IMF is worried about is a current practice now, one example is the reaction of Japan last month and unfortunately we are now in the middle of a struggle for recovery. This is a war that will help saving or creating some more jobs in the short run but this will lead to a decrease of competitiveness in the long run. Moreover, the use of the lower level of the yuan is affecting the equilibrium of the world economy and the consequences of this action would be another crisis if China does not try to adjust its currency to its right level.
This is the right time for the WTO: World Trade Organization to show us what they can do and if its an efficient Organization. The problem is a complex issue and it requires concession from China and also from western economies.
ERIC ROLEX JOSEPH
B.A
http://www.bbc.co.uk/news/business-11488501
It's a matter of "International Trade". We can complete our opinion with the meeting of The " G7" last week at Washington DC.
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