Not surprisingly, a plurality — 36 percent — of readers responding to EBN’s latest online poll believe a stronger yuan would make their businesses more competitive against China.
American manufacturers contend the Chinese yuan is undervalued by as much as 40 percent, according to MSNBC. This has cost millions of US manufacturing jobs by making Chinese goods cheaper in the United States and US products more expensive in China.
There isn’t a huge leap, however, to EBN readers who believe a stronger yuan would make their businesses less competitive (17 percent) or have no impact at all (20 percent). Most global businesses have operations in China, and many operate as Chinese companies. In these cases, a stronger yuan could eat into profits derived from the Asian market and increase labor and product costs.
Twenty-eight percent of EBN readers said they didn't know how a stronger yuan would affect their businesses.
The US is pressuring China to revalue its currency. China has allowed its currency’s value to increase by roughly 2.3 percent since announcing in June that it would introduce a more flexible exchange rate. Most of that increase has come in recent weeks after the Obama administration began taking a more hard-line approach and the US House passed tough legislation to impose economic sanctions on countries found to be manipulating their currencies, reports MSNBC.
Chinese officials say easing into revaluation is the best approach to take. Allowing their currency to rise too quickly would cost jobs and possibly destabilize the fast-growing Chinese economy.