Huang Peilin

IN recent months, the United States has intensified pressure on China to appreciate the renminbi, criticizing China for undervaluing its currency. It is believed that China’s currency policy offers domestic producers a competitive edge in global markets as well as costing U.S. jobs. Making China the scapegoat for America’s own domestic economic problems will neither clear up its financial mess nor combat unemployment; rather, it will damage trade ties between the two largest economies in the world, resulting in more severe economic turbulence worldwide.

As the 2012 presidential election looms, America is suffering from sluggish export demand and persistently high unemployment. The exchange rate of the renminbi is a perfect excuse for U.S. politicians’ incompetence but no solution to high unemployment. Moreover, as Carl Weinberg, chief economist at High Frequency Economics, said: “For U.S. politicians, it is simpler to blame and impose sanctions on China, and, anyway, the Chinese people do not vote in U.S. elections.”

The United States should be aware that it would still not see healthy employment figures even if the renminbi did appreciate. Owing to the international division of labor, an increase in the value of the renminbi may only benefit other developing countries instead of reviving the U.S. manufacturing industry and reducing its unemployment. Additionally, Chinese yuan appreciation will harm the interests of U.S. companies and consumers, as goods from China would become more expensive.

U.S. sanctions could trigger a trade war between the two nations, and consequently, endanger the global economy. In a written statement posted on its Web site, China’s Foreign Ministry reiterates the country’s firm opposition to pressure on yuan appreciation, saying the move may spark a trade war and hinder global economic recovery. The stability of the Chinese economy is crucial to the world economy, particularly at a time when a number of developed economies are still suffering weak growth.

The last thing America needs is a trade war with China. Nobody wants to see a trade war break out between the two largest economies, especially when Western economies are still stuck in economic downturn.

(The author is a student at Guangdong University of Foreign Studies.)