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Huanqiu: Chinese RMB Appreciation Would Reduce the U.S. to a Second Class Country

Huanqiu published an article titled “If the Chinese RMB Were to Appreciate Significantly, the United States Would Be Reduced to a Second Class Country.” The author, Tang Chunfeng, is a research fellow at the Chinese Academy of International Trade and Economic Cooperation under China’s Ministry of Commerce. Tang stated that the following would happen if the RMB exchange rate with the U.S. dollar were 1:1. China’s GDP would be close to three times that of the U.S. thus making it the No. 1 power in the world. The Chinese RMB would become the major currency for international trade settlement and for foreign exchange reserves. As the currency of the largest debt holder, the supply of RMB would be greater than domestic demand and China would become the “central bank” of the world. The value of overseas assets that Chinese owned would surpass that of Japan. China would finance its overseas investments with a zero interest rate. Today’s employees working for foreign bosses would be business owners bossing around their foreign employees. As the United States lost its economic power, humiliation and blows would ensue. Its Empire State Building and key industries might have to be sold. Even the Capitol and the White House might possibly be used to obtain mortgages to pay for its debts.

Source: Huanqiu, October 3, 2011