Americans have been calling for the Chinese government to allow the yuan to strengthen because thousands, if not millions, of American jobs have been lost to Chinese factories.
Rein gives the following reasons for his argument:
- Centres of production would not necessarily shift back to the USA. If they shifted away from China they would move to other low-cost countries like India or Vietnam.
- Workers in China are poor and would lose millions of jobs by allowing the yuan to appreciate to its normal levels.
This entire discussion has failed to recognise the impact on countries other than the USA and China of allowing the Chinese government to maintain an undervalued yuan. The Chinese government's aggressive interventionist policy to boost competitiveness of sectors like textiles has caused South Africa, for example, to suffer immense job losses.
China's continued currency market manipulations amount to a violation of workers' rights in South Africa and around the world. In African countries where unemployment is systemic and causes massive social problems, this rights violation is particularly severe. We should all join the call for China to allow its currency to appreciate as a step towards the progressive realisation of human rights around the world.