The Global Times published an article by a professor from the National Defense University titled, “Currency Exchange Rate Fight Is an Informational War.” The author argued that the U.S. pressure on China to appreciate the Renminbi is an information war with China in a broader sense. U.S. war tactics include information control and system integration. Its goal is to devalue the US dollar so as to pay less to China. The U.S. has set and controlled the tone of the information. It also tries to enlist allies to jointly fight China. China needs to improve its informational war capability by disclosing more true information on the Renminbi exchange rate and increasing China’s “speaking power” with international society.
The author also pointed out that every 1% appreciation of the Renminbi eats 1% of the profit for Chinese companies. Since Chinese export factories live on the average on a 3-5% profit margin, the currency exchange rate battle is critical to China’s economy.
Source: Global Times, March 23, 2010