Should China Be Labeled a Currency Manipulator? | China Uncensored


On this episode of China Uncensored, complex economic issues with no clear solution! Hi, welcome to China Uncensored. I’m Shelley Zhang, filling in for Chris Chappell, who’s out receiving vacation-style therapy. He’s going to be so relaxed when he gets back. Speaking of relaxing professions, in a little over a week, Donald Trump will be sworn in as President. And here’s one of the things he’s vowed to
do on his first day in office. “I’m going to instruct my treasury secretary to label China a currency manipulator— the greatest in the world.” It was one of President-elect Trump’s repeated themes during his campaign: that China is undervaluing its currency to gain an unfair trade advantage over the
US. And he’s promised to fight back with tariffs and taxes on Chinese imports. He’s not the first person to talk about this on the campaign trail. “As president, I’ll use all the diplomatic
avenues open to me to insist China stop manipulating its currency.” “On day 1, I will label China a currency manipulator.” Ah, the day one china currency manipulator
promise. A traditional part of presidential campaigning, right up there with visiting the Iowa State
Fair and eating whatever the heck this thing is. That’s why I love America. Because if you want to be president, you must first seek the blessing of the great
butter cow. So, on day one, the president will label China a currency
manipulator? Let’s be real, on day one of a new job, everyone is still trying to get their act
together. I once spent six hours waiting for IT to get
me a computer. But I’m sure that won’t happen at the White
House, because the US government is a bastion of
efficiency. Anyway, is China a currency manipulator? Well, it’s complicated. For years, China had a fixed exchange rate. I know, this already sounds incredibly boring. But stay with me. A fixed exchange rate meant that the yuan— the Chinese currency— would always be worth the same amount to the
dollar. From 1994 through 2004, it was 8.26 yuan equals 1 dollar. Now, other countries have fixed exchange rates
too. The issue is that as China’s economy grew
rapidly, the central bank kept their yuan fixed at
the same low rate, so it was worth less than it should have been. Which meant that Chinese-made stuff was artificially
cheaper. So more and more American companies moved their manufacturing to China, where they could get more bang for their buck. And by bang, I mean, yuan. You could literally pay people in China a
fraction of what you would pay in America. And all that extra money? Profit! So China kept its people poor to boost its manufacturing and exports. And America gained cheaper goods that led to a trade deficit with China while losing manufacturing jobs. Which is the real reason US presidential candidates always talk about China manipulating its currency. Now in 2005, China stopped fixing the yuan to the dollar. But they still heavily manage its exchange
rate. They control how much it can change each day, and buy and sell foreign currency to affect the price of the yuan. In fact, China’s central bank has the largest foreign
exchange reserves in the world. In 2014, they owned 4 trillion dollars in foreign currency. So yes, China manipulates its currency. But here’s where it gets tricky. In the last few years, China’s been going through an economic slowdown. And people are moving massive amounts of money out of the country. Both of those things make the yuan less valuable. And the US economic recovery means the dollar the strongest it’s been in
13 years. So in the last couple years, China’s been trying to manipulate its currency
the other way. Now it wants its currency to be stronger, to keep it from falling against the dollar. That’s because if the yuan falls too quickly, it could crash China’s economy. I believe we have a clip of Chinese economists trying to save the yuan: In fact, the Chinese government has spent almost a
trillion dollars of their foreign reserves trying to slow down the slide. And it’s still falling. Ironically, if the Chinese central bank stopped manipulating
its currency right now, it would have the exact opposite effect of
what Trump and other US politicians want. It might look kind of like this. So what would happen if Trump does get the
Treasury Department to officially label China a currency manipulator? Well, under a law passed in 2015, the Treasury would have to spend a year negotiating with the Chinese government. And then they still could do almost nothing
meaningful to stop it. Separately, Trump could still put tariffs on imports from
China, but that’d be a whole ’nother episode. Here’s the thing. When Trump and other US officials talk about
China gaming the system against the US, they’re right. For example, we’ve talked before on this show about how Chinese companies steal US technology
for profit with the help of the Chinese military. That sucks trillions from the US economy every
year. But officially labeling China a currency manipulator at this point won’t really achieve anything
meaningful. We need to be talking about the real issues. Like this key economic indicator: So, what do you think? Leave your comments below. I’m Shelley Zhang, filling in for Chris Chappell, who is back
very, very soon. And for you finance whizzes out there, yes, this is an incredibly simplified explanation that glosses over a whole bunch of economic
factors. But, I didn’t want to have to tell Chris I drove away all his viewers by using words
like “capital outflows” and “liquidity stress.” You’re welcome. What do you mean, you and Shelley have taken over the show?! I’ve only been gone a week! That’s it – I’m taking the next flight back to New York…

100 thoughts on “Should China Be Labeled a Currency Manipulator? | China Uncensored

  1. Actually you guys can still keep rotate between Shelly and Matt on china uncensored instead of just Chris alone, don't get me wrong, I like Chris, but personally I just think this keeps the show fresh to watch.

  2. Hi Shelly. I just wanted to genuinely thank you for explaining China's currency manipulation in such simple terms. I finally understand it fully after months of hearing about it! 🙂

  3. On Day One, Trump will label China a currency manipulator, repeal Obamacare, lock up Hillary, and give Kid Rock the Medal of Freedom for actually performing at the inaugural ball.

  4. Who actually benefits if China stop selling us cheap crap? Are well paid jobs making cheap crap going to be everywhere and start to benefit me? Hardly. It just means my cheap crap suddenly gets more expensive. Great.

  5. The PRC can already be labeled a manipulator based on their internal financial market and state-run banking system. That alone provides for a cheaper currency, especially when you resort to printing lots of money to finance failing industries.

  6. So in essence if the yuan was allowed to be a free market currency and rose over the years we would of just seen more made in Mexico or India. The only reason U.S. businesses are pissed is things didn't work out exactly as planned in China (Google lost to Baidu one example). They ran into a very nationalistic society that will buy China over U.S. brand goods (except maybe in the case of automobiles). Or just copy patents of things like Apple and sell it as their own label. Wall Street and Silicon Valley only saw a market that had a billion people to exploit and we can control them, but opened a Pandora's box along the way.

  7. Why not say "global economy" instead of "us economy" china is screwing us equally. Fixing against the dollar screws the rest of the world equally. So does the intellectual property theft.

  8. Yeah but let's be fair, China is manipulation a fiat currency (USD). That's also currency manipulation on what's supposed to be the currency of the world.

  9. US will continue on the losing side when TRUMP starts office from Day 1. His hate and denial for the TPP to exist will even make it even worst….. Sorry, US. as long as you have DUMB & DUMBER sort of politicians in Washington, D.C….. nothing will improve! So wake up before it's too late…..

  10. Good job, Shelly! Matt is great too! This the best channel on YouTube! How does so much great talent come together on one channel? Are you all members of some "pro-democracy cult?"

  11. I for one would love to hear about currency outflows, capital over-saturation, intensive margin and Hyperbolic discounting

  12. Should we question why this channel NEVER mentioned FEDERAL RESERVE system as well as the PLUNGE PROTECTION TEAM for their QE programs and market manipulation?

    You got 1 week time to mention this biggest financial manipulator, China Uncensored. Because PATRIOTS' wrath is one thing you don't mess with.

  13. hell yeah they should. a communist state like china shouldnt even be allowed in the world trade organization

  14. the leadership of china only really cares about whats its be ingrained in it, The art of war. And exploiting your own people ensuring they breed rapidly, also secures the state to exploit the people, to make the country powerful. reduce education and pathways, this then is used to exploit and change polices all around the world in their favour. America and china are not even close to enemies they work at the same goal it would seem to push ideals in every nation or country. Hong Kong and chinas various ports have a history of shipping many women in crates to be used for sweat shop factories. SO rather than studying going slow and developing tools, that expedite the job easier and less wasteful on the human spirit… that sort of avenue is closed off. its a pretty large pickle and since it is an art of war to secure territorial claims and brainwash its citizen it does so very interestingly. Such as when a quota of a populace becomes to smart, you real laws ,and allow the people to leave the nest in where they learned their abuses, Thus they go into other lands and do what they sort of did in their native culture. While then creating the next new class and al things are good, when people protest again, just send and allow all the protesters to constantly leave. Thus you have a system of economic warfare against the ideals of other nations. Its really that simple. Not saying china itself is a.. terrible.. well yeah I am. When I say china is a historical base of philosophical ideals that that tend to threaten peace and stability, but they seem to be the first to yell, peace, peace peace… yet, there never is really in the minds of anyone having peace. What a world… So While people are being exploited to make shit we don't need. We are all now trapped in business tyrants. Whilst if the academics were and state were still in control, I would beg to differ that the route would be a different direction. IN which printing and automation and skills of a different sort would be plentiful, but they teach a mantra, that is based on exploit and personalization of god. Like… You cannot enter heaven through works alone, is a different phrase that is often mis represented invidious ways, such as, you "should " work like the rest of everyone else… if not your lazy and stupid and a list on society, regardless if people murder or what not. So buckling down and studying or writing something is often a better mental pursuit that the need for greed, to make products that are… a material worship of nature, rather then its tool use of nature, and thus the pleasing sides of nature are the productions of those works, but things like music and skills of the mental assets because of these treasonous scum of ideology is becoming rampantly much harder to achieve, since they control resource asset sectors through american and chinese businesses. This has also put in the whole downfall of therepublics that had laws and regulations, and they march about in and out of other nations and destroy them by these means, using words, and these individuals if they cannot take over the government completely they take over parts of its and then wait each subsequent generation to push ideals against the populace itself. causing then the populace to devour itself. Not to mention nepotism and racism within the business sector of hires. Does it make the world better goods? Not really its a thing in the head, in which the good we can provide for ourselves is much better, but iwht lack of breeding and the destruction of manufacturing and development to better and faster tools, were at the whim of a strange decay. Its interesting to watch all these trad deals that try to make the individual more then the Government, thus the individual state is taught to be anarchist and or a stupid sheep that destroys their own laws because they elude to profits or wealth to individuals that then create and develop unsound laws and ideals throughout a society. Its a massive monumental organized criminal syndicate. Well, thats about it… Yeah, ideals… for whatever purpose… attack them..

  15. Anyway US need to be more strong concern business relegation. Communist must to know who there are really and communism don't have future.

  16. Of course China is a currency manipulator! Can we blame them? Not really. They are looking out for China and right now China's economy is fragile, but growing. From a foreigner perspective, we would expect China to look out for the greater good (the global economy), but they need to look out for their own economy first. It does not help that the Chinese Communist Party's legitimacy hinges on economic growth so they really have to make it work. The downside for China in all this is that even though the yuan is now has special drawing rights privilege, it does not instill confidence in buyers that the nation of the currency manipulates its currency. The investment world likes stability, and manipulating your currency is anything but stable.

  17. If this were a basketball game, US needs to play a full court press against China. So throw in the currency manipulator label and whatever policy restrictions US can throw against China Don't give China any inch of breathing space. Trump wants to make USA great again, and that means countering the moves of US' number one snake in the grass which is China.

  18. Wouldnt the IMF and World Bank be able to impose restrictions on China if USA labels it a Currency Manipulator. EU and UN could also force China to take steps to less regulate the currency.

  19. I just watched 7 part video of 'Hidden Secrets of Money' in youtube. It really tells alot about the difference of the actual value of gold compared to fiat currencies. Fiat currencies are really doomed to be destroyed. So it's better to hold gold. 🙂

  20. After living in China; you do the math…
    120RMB an hour x 70-80 hours a MONTH (exchange rate?). And that's a GOOD living…
    However, the avg worker; 3000-5000base, a month (exchange rate?)…

    So yeah-OF COURSE THEY HAVE TOO!

    You did GREAT Shelley!

  21. Well It's obvious america hasn't kept its promise. Its because obama was running the country. Obama is a damn liar just like most democrats. If Romney actually won the 2012 election, then he might have done it. But now we have a Republican now who's orange and tough. Sure he'd be tough on china

  22. That's a sovereignty issue, isn't it? That's why UK never wanted to join Euro zone and America was in as bad shape as Europe because we can print our own money.

  23. I'm guessing that the orange goblin and his anti-American GOP(Grab Our Pussy) party will not be charging Russia or their buddy Putin of invading and annexing Crimea or invading Ukraine, as the orange goblin and the Republicans work to undermine the US government and country and NATO for their buddy Putin! Also, the orange goblin isn't going to charge Putin with hacking US elections, which would be a a act of war if any other country had done what Russian had done for the Democrats, to help the treasonous, liar, seditious, swindling orange goblin to undermine the US with the help of the anti-American right wing propaganda machine or the seditious GOP politicians with their typical seditious and treasonous lies and spin!
    The sooner the orange goblin and his treasonous GOP are held accountable for what they have done, and are doing to the US, the better for the US and maybe the world, as the orange goblin and the GOP drive the US into right wing fascism and more capitalist unregulated greed!

  24. But the orange goblin was elected because he showed that he was as ignorant, a liar , seditious, a swindler, shallow, narrow minded so the Republican voters could relate with someone as ignorant ans stupid as they are! And now the GOP (Grab Our Pussy) party and the orange goblin are best buds with Putin, regardless that Russia is against everything the US is supposed to stand for, but stands for everything the orange goblin and the GOP want to be like, and they have made it to be somehow, patriotic!

  25. The government doesn't regulate the central bank, the central bank regulates the government. Why else would we use a debt based currency rather than gold? Or how the federal reserve can cause inflation/deflation literally on a whim? If you control the oil, you control the nation. If you control the food, you control the people. Wake up people they own you

  26. I know that Humor Ninja is funny but This is China uncensored not Japan uncensored. I don't know if this observation could be considered racist. Hope not. Love the show. And I think Shelley is really funny. Love it when she is in the videos.

  27. All the world's currencies are fiat currencies designed to be manipulated until they are worth nothing at all. Isn't this like a race car driver accusing other race car drivers of driving too fast?

  28. What a load of BS saying China tries to manipulate their currency to the other direction now. They still have artificially devalued their currency in the last year.

  29. They are currency manipulators and should be labeled so. Potential TPP signatory countries: do you wish to be ruled by China's communist bamboo diplomacy where they got all the spoils?

  30. Great show Chris Chappel . I hope your rest was good . You did look like you needed it . Great vids, great content , thank you for your insights , and info on china . GO CHAPPEL !

  31. I love when Shelly fills in for Chris. I hope he won't get offended, but I think she is great reporting serious issues.

  32. Wait a minute Shelly, you first say China pegged the Yuan to the dollar to make it and keep it weaker. Then you say Chinese began to sell Yuan to other currencies for fear it would get weaker, which does make it weaker. Well if it is weak, why convert? It's because the Yuan was strong and those holding Yuan thought the Yuan was going to get weaker that they sell their Yuan. Now as you said, the Chinese government is trying to support the Yuan to keep it strong. So, what's going on? Like most countries, like the US, they want a stable currency. Trump, like other political hacks, use the false narrative of China keeping the Yuan weak to make their products cheap. Well, partially true, but the big elephant in the room is the fact that Chinese labor was very cheap for unskilled high labor content products. American capitalists, as did others, did what they had already done in Japan, then South Korea and Taiwan, they moved their production to where they could maximize profits. So, who's to blame? The Chinese because they were an 'undeveloped' country so they could offer cheap labor? Or foreign companies taking advantage of cheap labor. The Chinese government didn't force foreign companies to come to China, they came because of their own desire to make more money. When China 'opened up', they came. The politician's claim of manipulation of currency has a good ring because it could be used to connect the loss of jobs to China because of a cheap currency. The truth was really cheap labor wherever it is found. Today, Chinese cheap labor isn't too cheap anymore, so where do multinationals go. They are moving to other countries that have cheap labor. The fact that cheap labor started in the US with slave labor, imported Chinese, Japanese, and Mexican laborers….moved to the far east with Japan's post-war cheap labor and continued on where cheap labor could be found as economies improved from their cheap labor phase. To blame China for jobs that were already lost to other countries is a misleading politician's rhetoric that sounds plausible to the electorate. The truth is that the 'devil is in the details'. BTW, regarding 'pegging the Yuan to the dollar', Hong Kong has for a long time pegged the HK dollar to the American dollar. No complaints there? Interesting that there are 17 countries that peg their currency to the Euro, and 13 that peg their currency to the dollar. Any complaints? The US devalued it's currency in 1971, the Japanese in 2003, why no complaint? The politicians only point to the Chinese. Why?
    https://www.investmentfrontier.com/2013/02/19/investors-list-countries-with-fixed-currency-exchange-rates/
    "Following the United States' measures to devalue the dollar in the summer of 1971, the Japanese government agreed to a new, fixed exchange rate as part of the Smithsonian Agreement, signed at the end of the year. This agreement set the exchange rate at ¥308 per US$1…..In the 1970s, Japanese government and business people were very concerned that a rise in the value of the yen would hurt export growth by making Japanese products less competitive and would damage the industrial base. The government therefore continued to intervene heavily in foreign-exchange marketing (buying or selling dollars), even after the 1973 decision, to allow the yen to float. Despite intervention, market pressures caused the yen to continue climbing in value, peaking temporarily at an average of ¥271 per US$1 in 1973, before the impact of the 1973 oil crisis was felt….The yen declined during the Japanese asset price bubble and continued to do so afterwards, reaching a low of ¥134 to US$1 in February 2002…..On May 9, 2013, the currency weakened to 100 yen = 1 US$ for the first time since April 2009
    https://en.wikipedia.org/wiki/Japanese_yen
    "But Abe would be wise to react with far more than just another yen devaluation. If Japan offers a cautionary tale, it's that weaker currency alone isn't the answer. If Abe had used the yen's 35 percent plunge since late 2012 to good effect — passing big reforms on labor flexibility, import tariffs, tax policy, supporting startups, reducing red tape — Japan might not be facing the prospect of another recession. Unless the prime minister changes course, Abenomics will be remembered as a policy that primarily benefited stock-trading hedge funds, not average households."
    https://www.bloomberg.com/view/articles/2015-08-13/china-s-devaluation-becomes-japan-s-problem

    So, it seems that when other countries weaken their currencies on purpose, no complaints. When other countries peg their currency to the Euro or dollar, no complaints. When China does either, all hell breaks loose. Is this prejudice on a global scale? Maybe….but certainly political rhetoric to get votes. I think it smacks of racism.

  33. If Chinese can DEVALUE its currency why the US can't do the same by 99% off. Oh, Americans will whine that they can't afford their not so cheap foreign vacation anymore.

  34. This channel is paid propaganda by Falungong – an anti-china organization as pointed out by Serpentza (a 504k subscriber's western youtuber). As Serpentza stated "there is a wikipedia article about how New Tang Dynesty Television that was supposedly started by Falungong members has been producing this show since 2012". Link of the video mentioned : https://www.youtube.com/watch?v=7tsXtk7psUc

    This channel is aim to gather and SELECT mono information that only support their goal by encouraging hatred toward their target. They purposely tell only one side of the fact (or only 1/3 of the fact sometimes) and add up heavy bias and exaggerated to mislead its audiences. For instance, an article they quoted, will only show you couple sentences that support their point of view, and the rest of the story (especially positive information that telling the truth but not conform to their purpose) will be censored. Such misleading conduct is kind of lying. People are indeed watching "Falungong Censored" rather than "China Uncensored".

    Not saying who is totally right or wrong, but I believe all the audiences here are good people and deserve to know the whole facts. I will suggest to check out more opinions as reference so that to help better judge. i.e. Serpentza's channel is also criticizing China when things go wrong, but in a relative fairer way. Also, below is some channels I subscribed, they are real westerner (American, English, Australian, German, Italian, etc) living in China. Please spend sometime check out what their insights are and maybe help coming up a fair judgement.

    Mamahuhu: https://www.youtube.com/watch?v=gysKE3POUv0&t=2s&index=6&list=PLrpawBpvhohCoGRjlzUxiDFiPknw2t1RF

    ByKaja: https://www.youtube.com/watch?v=JTtVR3w7VXo&t=0s&index=2&list=PLrpawBpvhohCoGRjlzUxiDFiPknw2t1RF

    Travellight: https://www.youtube.com/watch?v=bEL28bWAVZQ&t=0s&index=5&list=PLrpawBpvhohCoGRjlzUxiDFiPknw2t1RF

    Thomas: https://www.youtube.com/watch?v=b5akFt8GnMw&t=486s&index=9&list=PLrpawBpvhohCoGRjlzUxiDFiPknw2t1RF

    Yeah, It's Pretty Awesome: https://www.youtube.com/watch?v=uxyR_WJ1oHc&t=1s&index=14&list=PLrpawBpvhohCoGRjlzUxiDFiPknw2t1RF

    Ychina: https://www.youtube.com/watch?v=4Z9tXbC6jqw&t=0s&index=13&list=PLrpawBpvhohCoGRjlzUxiDFiPknw2t1RF

    Where's Poppy: https://www.youtube.com/watch?v=sxJ9TBMoAL4&t=0s&index=15&list=PLrpawBpvhohCoGRjlzUxiDFiPknw2t1RF

    https://www.youtube.com/watch?v=J7TJOmqOmaE&t=0s&index=16&list=PLrpawBpvhohCoGRjlzUxiDFiPknw2t1RF

    The JaYoe Nation: https://www.youtube.com/watch?v=8ood2Lh7w4s&t=0s&index=18&list=PLrpawBpvhohCoGRjlzUxiDFiPknw2t1RF

    RT America is also a good source for second opinions: https://www.youtube.com/watch?v=JaMy1APNgN8&t=433s&index=11&list=PLrpawBpvhohCoGRjlzUxiDFiPknw2t1RF

    I hope everyone can have a fair view, so decided to share at every biased posts.

  35. I think we should nuke china from space,,,, only way to be sure 😐 Actually no… theres some really sweet (nice, pretty, innocent women) there… that would REALLY break my heart 😐 How could any government threaten such a thing?

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