Why do top U.S. economic officials, such as Fed Chair Alan Greenspan and Treasury Secretary John Snow, want their Chinese counterparts to revalue the yuan (renminbi)? American officials and a wide range of American economists argue that the yuan is undervalued vis-à-vis the U.S. dollar (to which the yuan is pegged at a rate of approximately 8.28 yuan per dollar). The basis for their argument that the renminbi (RMB) is undervalued is the very large trade surplus that China has with the United States and the concomitant buildup of dollar based asset reserves of China's central bank, the People's Bank of China (PBOC), and other financial institutions. China has accumulated about $350 billion in foreign-currency reserves and over $122 billion in U.S. government bonds. In other words, China is using its trade imbalance with the United States to become one of the biggest creditors to the U.S. government (although this is only possible because the U.S. government is currently suffering......

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Title: China Economics Exchange Rate
Approximate Word Count: 1769
Approximate Pages: 8 (250 words per double-spaced page)

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