Revaluing the Yuan

Since Obama planned his trip to China there has been speculation as to whether or not he'd press China to revalue the Yuan. Rumors of revaluation pop up at least once a year, and occassionally the rumors are true (when I first moved to China at the end of 2005, the exchange rate was a little more than 8 to the dollar; when I left it was about 6.8 to the dollar--I should've saved more money). The value the US would like to see is probably along the lines of the standard of living, which would be around 2-3RMB to the dollar, but that is unlikely to happen for a long time.

Revaluing the Yuan is a touchy subject in China--many view it as pressure from Western powers to slow the Chinese economy or just a plot to destroy the economy (I had more than a few students write essays about this subject with little to no supporting details). Many Americans believe that a stronger Yuan will help the American economy, while many Chinese believe that a stronger Yuan will hurt the Chinese economy.

In the short term, a revalued Yuan won't do much of anything. It will improve the Chinese buying power of non-Chinese products, which are extremely expensive when considering the standard of living in China. But, it will also make Chinese products more expensive abroad, which could lead to people spending less on Chinese-made products. It is not likely to make Chinese products more expensive in China, which is the real fear of the working class there.

The fear that the Chinese government has is that a revalued Yuan will force foreign companies to move to cheaper countries. Some companies have already done so, but it was more about the rise of minimum wage in areas like Shenzhen (minimum wage is 1000RMB per month). Most companies can't move to countries with cheaper labor because those countries don't have the infrastructure or number of laborers that China has. Also, it costs money to build a factory and train new workers. The exodus of manufacturing jobs from China will not happen quickly--it's more likely that it may happen gradually over the next 10 or 20 years. This gives Chinese companies ample time to adapt to the changes.

The greatest fear should come from American businesses. With a stronger Yuan, Chinese businesses will have more money to spend abroad, which they would happily spend on acquiring foreign businesses and product lines (such as Hummer). Acquiring such companies and product lines will improve the image and quality of Chinese products abroad. And, Chinese businesses are not likely to keep manufacturing units in the US, thus costing more jobs in the American economy.

Soaked and Fake

It's been raining for the better part of the last week. Yesterday and today have been the worst with constant downpours. We're getting more rain than we did when the tail-end of the typhoon past through a while back. Fortunately, my area and university campus have decent drainage and there hasn't been any flooding. But, it does ruin plans for the three-day weekend with flooded roads to potential destinations. It looks like we get to spend the days inside watching TV and reading.

I was struck a little bit ago with a common gripe--finding a fake 1 Yuan coin. Identifying a fake coin is quite difficult. Generally, the fakes are slightly thinner than the real thing. Also, most fakes don't have any printing on the edge. For some reason, the one I had today actually had that printing.

I asked my students Thursday why people would bother making these. They responded with: "You can make a lot of money." This argument doesn't make sense seeing as it takes too much effort to make a lot of money 1 Yuan at a time (not to mention the cost of actual production). Is it really worth counterfeiting such small sums?

Transit Breakdown

As if transportation in this city weren't bad enough--it's already the most expensive in China.

Jia bought a metro card for me just before the national holiday last week. It was easier to buy it at 7-11, which meant that the 40 kuai deposit is non-refundable (as opposed to the refundable 40 kuai card you can only buy at some office). Anyway, the card had 50 kuai on it for use on the buses and subway. I have managed to use it five times up until today (total journey price: 12.5 kuai). I got on the bus this afternoon and the card didn't work. I kept getting no response.

The bus driver was saying something to me that I didn't understand because it was way to fast to comprehend. So, I decided I had better pay in cash. Of course, my smallest bill was a twenty. I turned around and asked the first person sitting if he had any change (in Chinese, of course). He looked through his wallet and shook he head. To my surprise, four others around him began looking at their funds. Finally, a high school girl came up to me with change and I thanked her. Of course, it still meant that I had to pay double the fair and try to get the other half from a boarding passenger (that's difficult when I don't know how to say, "I already paid, please give your money to me"). Fortunately, it all ended well.

Sometimes when things go wrong I find the best people around here.

All work and no play...

Because another foreign teacher is ill, I have been called upon to start work two days early. I don't mind much, it's an extra six hours for the week. In all, I'll make enough this week to pay my rent. Plus, I think this week is in the current pay period, which means I should get paid at the end of March rather than the end of April.
On another note, I'm trying some of the small-time paying web site out there. My feeling so far is, it was a waste of my time. I think I've made a whole $0.40 in the last three days. Hardly seems worth it. I think I'll stick to writing articles for a little cash and adding Google ads on the side for a few extra pennies. The most worthwhile endeavors online so far have been Gather and Associated Content. Gather has it's glitches, but it's more of a fun thing to use anyway. Associated Content pays a little, but I certainly wouldn't give them anything I could potentially sell elsewhere. Most of the writing on that site is pretty bad and you have to dig deep to find anything worth reading. Still, I'll take $10 from them for a hotel review when I have them. A few dollars does go a long way in China.