Pandas Fighting International Pressure to Change Currency Value

In this article by the Wall Street Journal, analysts predict that despite China's holding out and persistence of maintaining their currency at its current value, international pressures may force Beijing to force its hand. The yuan has been kept intentionally undervalued by Chinese economic policy makers as a method of causing Chinese goods to cost less in foreign markets, thereby undercutting any competition. But what change could a potential currency change have on China domestically? It would most likely interfere with China's internal efforts to modernize its economy. Proposals to revamp the country's financial system and boost domestic consumption, while necessary, create some level of uncertainty. Any rise in unemployment or the drop in the country's overall economy, if combined with actions letting the yuan appreciate, could put Chinese officials in a difficult position.

This issue certainly has international implications, but as the final statements in the article summary establish, it has serious internal ramifications as well. China's burgeoning growth is already considered dangerous and even borderline unsustainable, and any drop in production or employment could prove disastrous for not only the Chinese economy but Chinese politics. As a generational hand-off is about to occur (approximately in 2012), should the change occur in a time of domestic economic catastrophe, the results of a new government are utterly unpredictable. However, what I believe will happen is that the China Model will disintegrate and Systems Theory will take its place, in that a younger generation opposed to the old system of party rule will emerge and establish responses to the inevitable cries for help of the Chinese poor and middle classes.

If an economic crisis emerges, we may see Panda hobos such as these: