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what causes a breakeven trade balance with the rest of the world when you peg the yuan to the dollar?

vandit asked:

The yuan low to the world why.

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This entry was posted on Friday, June 5th, 2009 at 11:54 pm and is filed under Forex FAQ. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

2 Responses to “what causes a breakeven trade balance with the rest of the world when you peg the yuan to the dollar?”

1. meg on June 6th, 2009 at 3:16 am

   The EU also has a large trade deficit with china.

2. NC on June 8th, 2009 at 7:59 am

   It doesn’t. China is a net exporter or goods and services, whether you consider the world overall or world ex-U.S. China maintains a trade surplus with both the U.S. and EU; China maintains a trade deificit with Japan and Taiwan, although it is not clear whether it is a statistical aberration (about 17% of China’s exports are “exports” to Hong Kong meant largely for re-exporting).

   The world pays for Chinese exports in part by selling the Chinese capital assets (bonds, stocks, land, companies, and real estate).

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