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Don't let US yuan squeeze strangle Chinese jobs
Employment is not just an American issue. The Chinese government has gone all out to boost domestic employment, too.
This is a reality that some US politicians fail to acknowledge while pushing China on the yuan in an attempt to solve their prickly unemployment problem at home.
The pace of the yuan's appreciation has always been carefully calculated by China, so that its potential impact on domestic employment can be minimized.
The latest example is the numerous field trips to coastal areas in February and in March made by government-sponsored research teams. Their assessments of the impact of the yuan's appreciation on China's employment situation will factor into the country's decision-making process on adjusting its currency policy.
The result of these assessments is hard to predict now, but there is no doubt that domestic employment cannot afford a sharp currency appreciation, not to mention the 20 to 40 percent rise that the New York Times columnist Paul Krugman would like to see.
It is estimated that a sudden 3 percent rise in the yuan's value would have serious implications for employment, especially in labor-intensive industries. For the textile industry alone, it would mean a loss of at least 25 million job opportunities.
Should China do as Krugman suggests, the impact would be disastrous for the Chinese people.
With 6.3 million new college graduates seeking jobs this year, and an estimated total of 225 million migrant workers in the job market, the task of safeguarding job seekers' interests could be even tougher for the Chinese government.
The risks arising from a dramatic change in the yuan's value would have political, economic and social ramifications that could by no means be ignored.
In the post-financial crisis world, fostering employment growth is every government's priority. The ultimate solution to employment lies in each government's down-to-earth efforts, and not in the blame game currently being played by some US politicians.
At one point, the financial crisis resulted in 7.5 percent of small- and mid-sized enterprises closing and as many as 20 million migrant workers losing their jobs in China.
The various measures taken by the Chinese government, including increasing infrastructure investment, boosting domestic demand and adjusting industry structures, have proved effective in creating jobs.
A similar rule may apply to the US. The root cause of the "jobless recovery" the US is suffering lies in the fundamental flaws in its economic structure. Only with serious reflection and corresponding corrections can employment be pulled out of its current stagnation.
Chinese job seekers' interests are no less important than those of Americans. The US squeezing of the yuan will strangle Chinese jobs. Neither the Chinese people nor China's government will accept that.
Making a humble effort to find the real root cause of unemployment is the only option available to any government that truly wishes to be accountable to its people.
- Source: Global Times
Employment is not just an American issue. The Chinese government has gone all out to boost domestic employment, too.
This is a reality that some US politicians fail to acknowledge while pushing China on the yuan in an attempt to solve their prickly unemployment problem at home.
The pace of the yuan's appreciation has always been carefully calculated by China, so that its potential impact on domestic employment can be minimized.
The latest example is the numerous field trips to coastal areas in February and in March made by government-sponsored research teams. Their assessments of the impact of the yuan's appreciation on China's employment situation will factor into the country's decision-making process on adjusting its currency policy.
The result of these assessments is hard to predict now, but there is no doubt that domestic employment cannot afford a sharp currency appreciation, not to mention the 20 to 40 percent rise that the New York Times columnist Paul Krugman would like to see.
It is estimated that a sudden 3 percent rise in the yuan's value would have serious implications for employment, especially in labor-intensive industries. For the textile industry alone, it would mean a loss of at least 25 million job opportunities.
Should China do as Krugman suggests, the impact would be disastrous for the Chinese people.
With 6.3 million new college graduates seeking jobs this year, and an estimated total of 225 million migrant workers in the job market, the task of safeguarding job seekers' interests could be even tougher for the Chinese government.
The risks arising from a dramatic change in the yuan's value would have political, economic and social ramifications that could by no means be ignored.
In the post-financial crisis world, fostering employment growth is every government's priority. The ultimate solution to employment lies in each government's down-to-earth efforts, and not in the blame game currently being played by some US politicians.
At one point, the financial crisis resulted in 7.5 percent of small- and mid-sized enterprises closing and as many as 20 million migrant workers losing their jobs in China.
The various measures taken by the Chinese government, including increasing infrastructure investment, boosting domestic demand and adjusting industry structures, have proved effective in creating jobs.
A similar rule may apply to the US. The root cause of the "jobless recovery" the US is suffering lies in the fundamental flaws in its economic structure. Only with serious reflection and corresponding corrections can employment be pulled out of its current stagnation.
Chinese job seekers' interests are no less important than those of Americans. The US squeezing of the yuan will strangle Chinese jobs. Neither the Chinese people nor China's government will accept that.
Making a humble effort to find the real root cause of unemployment is the only option available to any government that truly wishes to be accountable to its people.
I like the last sentence. ;)