Foreign investors in China have no such flexibility in their business decisions, so their currency has no real underlying value to it (if you have any doubt about this, just ask anyone who has done business in China how much value they place on Chinese currency). What this means is that China's currency only has any value in the sense that it has a defined relationship to another currency (i.e., the U.S. dollar). If you are a Chinese tycoon and you want to buy thoroughbreds from a Saudi prince, he sure as hell isn't going to accept a bazillion yuan for it unless he knows for sure that a bazillion yuan exchanges directly to some fraction of a bazillion U.S. dollars.
In linking its currency to the U.S. dollar, what China has done is institutionalize itself as a cheap manufacturing center for U.S. consumers. In other words, they have voluntarily done what no American in his right mind would ever do -- permanently establish himself and succeeding generations of his family as a low-paid laborer who manufactures things he'll never be able to afford.
Just think about that for a moment. China has basically established itself as our permanent source of slave labor.
In linking its currency to the U.S. dollar, what China has done is institutionalize itself as a cheap manufacturing center for U.S. consumers. In other words, they have voluntarily done what no American in his right mind would ever do -- permanently establish himself and succeeding generations of his family as a low-paid laborer who manufactures things he'll never be able to afford.I would add the caveat that the "voluntarily done" wasn't the populace's idea...but Chi-Comm dictate. China's Communist Party intends to become industrially dominant. ASAP. And they want to do it without generating a troublesome, potentially uncontrollable true middle class. So they give the plum jobs to Party cadre, Princelings, ex-or-current PLA officers, etc. That's their "middle class."
Where I really would differ is here...
Just think about that for a moment. China has basically established itself as our permanent source of slave labor.
I don't think this is either intended to be, or will remain permanent. It will be maintained for as long as it takes...long enough, however, to accomplish their Chi-Comm purposes...which I should stress...do not mean us well.