People in the developed world blame the Chinese for the flight of textile and toy factories out of their countries. Reluctant to begrudge the Chinese their paltry salaries, they have made the chinese yuan their bête noire. Thus 63% of Americans and 55% of Europeans believe a revaluation of the yuan would help protect employment in the West against competition from
This just shows that Western leaders, who flocked to
The leaders in Beijing responded "It is out of the question that we accelerate our reform program and risk the double digit growth which we need to drag our population of 1.3 billion out of poverty. We are already doing the best we can".
They are right. To achieve the goal of a "harmoneous society", advocated by president Hu Jintau,
Their efforts to stimulate demand are no less significant. In 2008, in three provinces, the government offered an experimental tax rebate of 13% to tens of millions of peanants on the purchase of TVs, mobile phones, fridges, and air con. The cut-off point for entering the tax net was also raised from 1600 yuan (150 euro) to 2000 yuan. This should make 70% of employees exempt from tax, up from 50% today.
Better still, a significant piece of legislation on working conditions came into effect on 1st January. The new law makes employment more secure, provides for redundancy compensation, and obliges employers to pay social indemnities on salaries (retirement, unemployment, health). The penalties for infringement suggest that these norms will eventually be adopted. The cost of labour and Chinese exports will be increased in consequence. This should be to everyone's satisfaction.
The anti-Chinese hysteria therefore, accentuated by the electoral race in the
But such official recognition is no more than what is right from a country which, last Summer, might well have pushed the world economy into recession due to failures in its banking system which resulted from an inability to manage high risk loans. Who is preventing the world economic growth rate from falling below 4.5%? Not the
Who prevents the dollar from collapsing dramatically, if not
Low Chinese prices have helped control inflation in the west, thereby preserving the purchasing power of industrialised nations. The Chinese buy massive quantities of African primary resources thereby proping up the price of metals as well as agricultural produce. Not only do they provide valuble currency to weaker economies, but they also sell them manufactued goods which are cheaper and better adapted then those from the rich countries.