Chinese currency to be depegged

Since 2008 the Chinese currency, yuan or renminbi, has been prevented from fluctuating. Now, the government is making plans to let the currency revalue gradually. The Chinese government will be largely in control of all aspects of the shift. Some think this change may be brought about by the U.S. suggesting that China was "manipulating currency". What we do know is that when the peg is removed, the relatively inexpensive Chinese goods that we have now will raise in price slowly. Similarly, U.S. goods exported to China will become more expensive. This will help lessen the large trade deficit between the two countries, which as been said to be an unfair and pointed action by the Chinese. China argues that the currency is not undervalued and that the trade deficit is due to their abundance of cheap labor. What do you think?

Submitted by: Mallory Neumann

http://www.cnn.com/2010/BUSINESS/04/06/beijing.rmb.shift.ft/index.html