To say that this issue has been a contentious one would be making the understatement of the year. The debate goes like this: The United States, under the Bush Administration, contends that China is unfairly manipulating its currency to keep it at the 8.3 it’s been for the better part of a decade, basically floating against the dollar. China, on the other hand, denies any wrong doing, and maintains that the floating exchange rate is necessary for maintaining economic growth. This is not the first time there has been a trade issue between the U.S. and China; in fact, very recently, U.S. software manufacturers shot some rounds of ammunition at the Chinese government for not doing enough to curtail an apparent software piracy problem. Many manufacturers have been citing the low wages paid to its factory workers as an unfair competitive advantage. Despite all this, the main point of the contention is about the non-existant fluctuation of China’s yuan currency, and its affect on the major trade deficit the United States currently has with China.
