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To make its low-cost exports preferable to low-cost products made in other countries, increasing the competativeness of Chinese industry and bringing weath into China.
kchur is correct that is why America has been trying to get them to start monetary policy reform
When the exchange rate for your monetary system is artificially kept lower than it should if free floated, then that country gains an advantage with exports. Why?. Because that country's goods will arrive to the destination and when shipping costs are included, still be a lot cheaper than similar goods made at the importer's country.
And it is not only USA requesting China to appreciate the value of the Yuan. there are also many other countries doing the same, mainly from Europe.
It is consider that the yuan has moved from 8.3 per dollar to about 6.3 per dollar now, and still has another 30 % or so to move upwards to be at the proper value.
kchur:
Many countries artificially lower floated currencies through the tricky selling of bonds or other more traditional methods. Canada, Singapore, Scandinavia, half of Europe before the Euro was introduced. The fact that China has to peg their currency like flippin Bosnia or one of those former-French colonies in Africa really makes me less than confident about the long-term economic stability here.
HappyExpat is extremely correct. The whole world is on China right now to appreciate its RMB, that is also why the importing tax from America on China is now at 158% of it's value. Good bye small business, hello more corruption
Interesting update to this question:
http://www.bbc.co.uk/news/business-17362888
I wonder if they mean it...
even the fruit and veggie sellers will fleece a foreigner in front of others, so is it any wonder the practices would change in the higher ups?
