The phenomena of this Chinese currency should be a lesson to the third world and emerging economic countries, in that the Chinese currency including the Yen, can be manipulated by threats of tariffs.
A country cannot survive international pressures IF it does not have a strong domestic economy. China's claim to international economic markets is the fact it has a cheap workforce which makes it an exporting country. China imports very little, but, for very profound reasons.
Differently said, there is no reason for China to have a stable economy or currencies. It has no stable domestic economy that provides the country with a stronger currency. Resilience. There is no inherent resiliency to the Chinese economy, it is dependent on international trade. That is a very bad place for any country to be. The reason China survives these assaults on it's economic stability is that it is a communist country whereby citizens are workers and not consumers.
Communist countries, such as China or Russia, can build their military in the face of economic collapse. It doesn't need money. These countries have no real incentive to improve the quality of life of their people. We have witnessed the stagnation in Chinese and Russian leadership that only instills a stronger regime that oppresses the people.
It is reasonable to ask the question, "Does China or Russia actually want to be emerging countries outside the desire to destroy the Free World?" China was all too eager to provide cheap wage labor to the Free World, without any commitment to improve the quality of life of it's citizens. In other words, China alone can trap the Free World into a dependency on it's labor, while de-escalating the strong economic machine that has been the USA. What has resulted in the USA in the face of cheap Chinese labor is The Working Poor. China definitely depresses the wage in the USA.
This entire dynamic of China, calling it the second largest economic power in the world, is artificial. The tariffs are proof of that. The tariffs can bring economic penetration into the global economy by China to a standstill while shrinking the previous economic success of China. China has no resilience in a domestic economy. A stronger Middle Class in China would remove incentives for Free World companies to continue to use Chinese labor.
That is China's folly.
It believed it could take over the entire labor market of major Wall Street companies deflating the economic strength of the USA. Americans don't like to work for nothing, while citizens of communist countries accept their poverty. The resiliency of the USA economy allows for vibrant entrepreneurship and very stable local economies. China cannot completely remove the American will for a strong and successful "American Dream."
The current tariffs will compromise China and Russia's desire to end the economic strength of the USA. It only illustrates how opening relations with China so long ago was correct, however, China derailed it's own economic success because the communist regime is more interested in power than the quality of life of it's own citizens and it's own ability to manufacture to strong domestic consumerism.
China and Russia have lost the war to defeat the USA's economy. It would be best for these countries to embrace the idea of being a legitimate emerging economy and reward their citizens with a strong Middle Class and quality of life and end any international military ambition that would rob those citizens of such national achievements.
May 13, 2019
By Hudson Lockett and Daniel Shane
...A weaker exchange rate (click here) in the wake of the latest rise in US tariffs would provide China with cheaper and more competitive exports as it grapples with the latest demands for concessions out of Washington. But it would also have costs.
In August 2015, Beijing carried out the biggest one-day devaluation of the renminbi in more than two decades, in what critics described as an effort to boost its export-driven economy. However, the downward adjustment of the currency exposed China to criticism and it complicated relations with the US, where politicians have long argued that the renminbi is undervalued.
The move also undermined China’s efforts to have the renminbi accepted as a global reserve currency alongside the dollar, yen, euro and sterling. Gains made by the renminbi in this respect, before the devaluation, have since been reversed. In March the currency accounted for just 1.2 per cent of international payments, according to data from Swift....
