US Urges China To Appreciate Renminbi

President Obama on his current visit to China had discussions on a number of issues and has pledged to work on pressing international issues. In a joint statement, both the governments spelled out a program for ever-growing co-operation including stronger ties between their militaries, joint research initiatives on climate change and clean energy and even “a dialogue on human space flight”.

Apart from these, the US president has also expressed his view to let China allow the Renminbi (RMB) to appreciate. The depleting dollar is not doing any good in stabilizing the US economy. China has pegged its currency on a fixed basis to the US Dollar. Apart from the Fed, China is the largest holder of the USD. The economic revival of US and the other economies of the world depends on the stability of the US dollar. China is the largest exporter partner to the US which gives advantage to the Chinese exporters.

Chinese officials feel that keeping the RMB stable has helped in fighting the crisis and stabilize global financial economies. They have also criticized the loose monetary policy in the US. What steps China takes ultimately remains to be seen.