Summary:
Two weeks ago, China reported a $7.3 billion trade deficit in February as imports rose sharply and exports declined slowly. Chinese officials, looking for a way to surmise what happened, said that much of the impact came from the Chinese New Year, which significantly reduces the export market for China annually. This was the first monthly trade deficit in China since March of 2010. Last month, imports totaled $104 billion, which was a whopping 19% higher than average. Chinese officials have reported that they are trying to improve this issue by promoting more domestic consumption, which is currently growing at a 20% year-over-year rate. Unfortunately for China, the New Year there accounted for a widespread work shortage. The fact that China traditionally exports far more than it imports has been a sore point in Washington, D.C. as the U.S. does just the opposite. As the U.S. tries to double its exports by 2015, experts strongly agree that China should allow its currency to appreciate. Americans also claim that China continues to undervalue its currency, allowing for more overseas trade.
Significance:
This article strongly pertains to what we talked about in terms of the international economy and how China purposely manipulates it. As the article states, China has allegedly tried to undervalue its currency so that it can be more attractive to foreign markets. This also ties into the fact that China is far less concerned about human rights issues and the like, which is why the U.S. is not pleased with the way they do business around the globe. They often overlook genocides and other harmful government acts and only look at prices. This article is also pertinent to our classroom discussions because of China's connection between the economy and the state. I was surprised that, since China's government is so concerned about the economic well-being of the country, it would still allow for export levels to drop. The government is extremely focused on maintaining a slow but steady growth rate, but it was able to overlook its economic goals for such a special occasion as the Chinese New Year.
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