Wei Jingsheng Foundation News and Article Release Issue: A556-W325

魏京生基金会新闻与文章发布号: A556-W325


Release Date: June 27, 2010



Topic: The Way Out for China (Part XIV) Chinese Currency - by Wei Jingsheng

标题: 《中国的出路》之十四: 人民币的汇率 -- 魏京生


Original Language Version: Chinese (Chinese version at the end)



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The Way Out for China (Part XIV) Chinese Currency

-- by Wei Jingsheng



Right before Chinese president Hu Jintao attended the G20 summit in Canada, the Chinese government played a little trick by claiming it was ready to allow the Chinese currency RenMinBi (Chinese yuan) to move more freely against the US dollar, i.e. let the RenMinBi increase its value.  Indeed, a few days before the summit the value of the Chinese currency went up a little bit, thus receiving a lot of praise from the international society including from US President Obama.  "China's decision to increase the flexibility of its exchange rate is a constructive step that can help safeguard the recovery and contribute to a more balanced global economy," Obama said in a statement on the same day.


Yet, the good news did not last long.  Within a few days, there came the news that the Chinese state banks heavily bought US dollars in an effort to devalue the yuan.  Why, at this critical time of serious inflation inside China and the threat of international trade war, wouldn't the Chinese government raise the value of the yuan to solve these two issues at the same time?  Instead it preferred to increase the inflation and increase the risk of trade wars.  This kind of unreasonable conduct provides food for thought.


From the immediate reaction of the Obama administration to the increase of the yuan value, the Chinese Communists might have overestimated their ability to buy out the American politicians.  The value of the yuan rose one day and then devalued on the second day, giving a heavy slap on the face of those who are friends of the Chinese Communists.  Yet, the pressure from the US Congress' and the US government's demand for the increase of the yuan's value has not decreased.  Raising the yuan's value is still the topic of the highest priority in the G20 summit in Canada.  The US Congress is still pushing for a resolution to severely punish the Chinese government.  So regardless whether the yuan devalues or not, China's trade to both the USA and Europe will still drop rapidly; meanwhile, it will pay more foreign currency when it imports goods.


Why, instead of drinking a toast, did the Chinese government rather be made to drink a forfeit?  Why would it refuse such a matter which really should be beneficial to the Chinese economy and make everyone happy?  Examining more carefully, we would know it is really an issue of who would benefit and who would be victimized.  The increase of the yuan's value would be beneficial to China and the Chinese society, but not to those in minority who control the fate of the country.  Those in minority would put the interests of the country and people aside, and even victimize the country and its people.  This selfishness is the characteristic of the politics of an autocratic country.


A rising value of the yuan would result in a loss of massive amounts of foreign currency.  Who would care?  Of course it would be the organizations that use China's money to speculate.  Who owns these organizations?  They are controlled by the relatives of the corrupt Chinese officials.  Using China's money, these people speculate on currency exchange and own a fortune more than that of smaller countries.  Yet, they are absolutely not willing to take any losses.  They are also capable of controlling the nation's policy, in an effort to avoid personal loss.  This is the time when their personal interests are far above the interests of the country and its people.


The direct result of a rise of the yuan's value would be the decrease of export and increase of import.  This would expand China's internal market, which would compensate for the reducing international market.  It would reduce the trade conflict while effectively increasing the income of the Chinese people and reducing the risk of social conflict in China.  However, some export businessmen who make money by cruelly exploiting the workers would have to reduce their incomes.  This is the root reason why they are firmly against the rise of the yuan's value.


The very unfortunate fact is that the power of these minority businessmen, both Chinese and international, is much stronger than that of the working classes both Chinese and international.  In the Chinese environment where the Chinese people cannot vote for their political leaders, this minority capitalist power is almost infinitely huge.  So the interests of the country and the people are not within the consideration of the Chinese Communist government.  Thus, as the majority Chinese people fall into the world-manufacturing center of sweatshops that make excessive profits for the capitalists both inside and outside China, they can only live impoverished lives.


The issue of raising the yuan's value is not just related to the Chinese economy, but also closely related to the economy of developed countries in America and Europe.  The over-developed foreign trade with China has not only produced unbalanced trade, but also damaged both the Chinese society and the economy of the Western developed nations.  One of the results of this imbalance is the excessive increase of imports in the developed nations, yet an inability to export.  The huge trade deficit increases both unemployment and national debts.  The accumulation is the current economic recession.


However, democratic countries are different from autocratic ones.  People's votes make the ultimate decision.  When the people realize that their interests are damaged, the politicians have to react.  This is the reason that trade wars are becoming stronger and stronger.  Of course there are some suspicious politicians trying their best to defend the Chinese Communist Party and big business.  They are trying to shift the attention in an effort to fish in troubled waters.  Nevertheless, public opinion is much clearer after debate, and these problems have already come to a degree that could not be covered up.


Now there are two choices in front of the Chinese Communist leaders.  The good choice is to raise the value of the yuan dramatically, to balance the trade, and meanwhile to raise the income of the workers.  The result would not only reduce the ongoing inflation, but also reduce the incisive conflicts both inside China and outside China.


The bad choice is to keep the relatively low currency exchange and to continue the aggravation of conflict both inside and outside China.  This choice will result in the Chinese people's resentment against the rich expanding into a political mood and leading to social turmoil.  The international trade barrier will induce a massive reduction of export, in addition to the inflation inside of China.  The result would be a collapsed economy and great disorder through the whole society.  While the people are living in an abyss of suffering, the Communist Party could not have a good end either.


Many friends are reckoning that, from the patterns of the Communist autocratic interest groups, the possibility for the good choice is low.  More likely, the Communist Party will choose collapse.  It will behave like most addicted gamblers.  Even knowing that they are losing the family fortune, they will still press resolutely forward towards bankruptcy.



To hear Mr. Wei Jingsheng's commentary, please visit:



(Written on June 23, 2010, and recorded on June 24, 2010.  Broadcasted by Radio Free Asia.)



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Wei Jingsheng Foundation News and Article Release Issue: A556-W325

魏京生基金会新闻与文章发布号: A556-W325


Release Date: June 27, 2010



Topic: The Way Out for China (Part XIV) Chinese Currency - by Wei Jingsheng

标题: 《中国的出路》之十四: 人民币的汇率 -- 魏京生


Original Language Version: Chinese (Chinese version at the end)








《中国的出路》之十四: 人民币的汇率

-- 魏京生






































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