So much is said about China’s manipulation of its currency. It is unfortunate that China is the only one that thinks differently about its currency manipulations. In recent past we have seen IMF, EU, World Bank, Western politicians, economist and even Wall Street Traders stating in different tones that indeed China is manipulating its currency.

It is important to critically examine why the US Treasury wanders into China currency to see if they are manipulating it in any way or if it is undervalued. Most times we find the China refuting claims of it manipulating its currency. A larger proportion of people in congress believe that China is manipulating its currency, but at the same time starting a trade was and imposing sanctions on China is a dead-end. This is not economically feasible as Geithner states that this move is a silly one and can be politically influenced. At this time, I don’t for once deny the fact that China has manipulated its currency downward, denying it the chance to float against the dollar.

For all we know, China has been into the game of undervaluing its currency, especially against the U.S. dollars. This is done in a view of helping control over importation and exportation between the Chinese and the Americans. This is a veritable way that allows the Chinese control the amount of importation and exportation with the United States and other European Countries. What the Chinese do is to always value the Yuan lower than the US dollar; this is pegged at a level that makes American consumer believe that it is profitable to import products from China. Although, they are issues of low labor cost in China which has in so many ways prevented the Chinese from exporting as many products from the United States because the US Dollars is higher in value than the Chinese Yuan.

China has been able to gain from this, as more jobs are now being created in China and more products are designed in China. On the contrary a stronger Yuan is most probable in today’s market but not for the manipulation by the Chinese government. A stronger Yuan would imply that American companies would be more comfortable to produce products in the US instead of having to purchase from China. This would invariably create more jobs in the United States.

In a perfect situation, the fluctuation of currencies is to steady the economies of countries. This is sustained to cancel out importation and exportation of the participating countries. With the Chinese controlling their currency from the ideal fluctuation; China tends to have more exportation than importation. The United States incurs more debt because they are coerced to buy products from the Chinese via currency manipulation policies. We have also seen a decrease in exportation of United States products and profits accrued from exports have dwindled over the years.