The US criticises the weakened Yuan – Protectionist policies

Sunday, October 18, 2009

I wrote a blog last week about China’s exports recovering from a huge dip. They have done this by actively keeping their currency weak and proving firms with tax rebates to ensure companies maintain their price competitiveness. This has angered the US who feel China’s currency is undervalued by 20% to 40% which means that Chinese products are cheaper for US consumers and American products cost more in the Chinese market. This would be a good article to use when teaching currency, the balance of payments or protectionist policies. Click read more for some GCSE style questions on these topics

Explain two ways in which the US could protect their industries from competition from China. (4 marks)

Explain why a weakened Yuan could be a problem for US companies. (3 marks)

Explain one method of weakening a currency. (2 marks)