http://www.theatlantic.com/doc/199203/barber
Speaking of McWorld....
RECENT renewed American calls for China to revalue its currency have so far fallen on deaf ears. China has rejected accusations that America's huge trade deficit with it is caused largely by an artificially weak yuan, which has been pegged to the dollar since July 2008. Economists point out that an appreciation of the yen did little to help reduce America's trade deficit with Japan in the 1980s. But the yuan is unquestionably undervalued. Our Big Mac index, based on the theory of purchasing-power parity, in which exchange rates should equalise the price of a basket of goods across countries, suggests that the yuan is 49% below its fair-value benchmark with the dollar.
The Economist's Big Mac index seeks to make exchange-rate theory more digestible. It is arguably the world's most accurate financial indicator to be based on a fast-food item. (Here is a brief explanation and video clip.)
2 comments:
No matter what is said it seems to me that globalization will be necessary, speaking from the people's view. This is because almost no matter where or who you are your goal, or drive, in life is almost unanimously to obtain more or to obtain what others do not have, thus gaining a show of power. The only way to for one to do this is to be able to access other markets that have the goods that your market doesn't. Barber's confederal union may look good on paper, but the public will not willingly go along with this form of an economy that involves a life of normality and equality.
So I guess as long as the People's Republic provides the world with cheap products, its human rights record wont matter. I guess people forget Tienamen Square when they see an amazing vest for $10, or shoes that only cost $50.
And will not the rise in the Yuan's value mean that cost for Chinese imports will go up, so the $50 shoes from Nike might now cost about $60, the $10 vest will go up to $12, and while it might not seem like much, who knows if the value of the yuan would ever exceed the dollar. It sounds as if the calls for the deregulation of the Yuan's value are coming from the same people who want to hault outsourcing and bring back the manufacturing jobs to the States.
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