You wrote that income from tariffs on imports from China goes to the Chinese exporter yet you have the nerve to tell another poster to go back to school!
That was an example. So that people with low IQ understand the concept. In that same example for simplicity I said 1 yuan = $1. Obviously, some still didn’t get it.
Forgive him. He is having a mighty hard time with this. Calling other posters ignorant, uneducated, and telling them to go back to school are only reflections of himself. It is called "projection".
they are not using yuan to buy their resource, they are using dollars. devalued mean the trade gap will get bigger. farmer can grow other stuff but doesn't mean they have market to sell it.
It is obvious that the US is everybodys bitch. Trade deficit is expected to reach an other record high
And they have so many dollars, that they are plastering the walls with it, while the US is printing like crazy and borrowing like a drunken child.
China will win in the end because it has a relatively homogeneous society and a government that though flawed has made its business just that, business, which is what the US used to do. We will continue to drain our wealth on government spending including healthcare, education, military (protecting Israel and the banksters) and foreign aid while China will cut through the nonsense and press on. Trump claims to be fighting the NWO and its anti-American globalist policies, but even if he is he is a pinprick in the heart of a machine that is hell bent on destroying America and it's place in the world. The Western "we are the world" globalists believe the West and everything it has achieved needs to be reduced if not totally destroyed and anything non-white non-Christian is benevolent. The Chinese wait for the West to capitulate and for some new rough beast to be born.
Trade is done in dollars, not Yuan. So they have extra Yuan to play with inside China. If they buy stuff it costs them, but China sells a lot more than it buys.
Sorry, but it means they get more yuan for every dollars worth of stuff they sell us. What they do with those extra yuan is totally up to them. Do you somehow think Harbor freight signs a contract with China that says we will pay you 7,000 yuan for that air compressor or do they sign a contract for $100? https://www.alibaba.com/bulk?src=se...ATOqonbc6jahjnEB4qQYwkw8WLg0JB-xoCZ7MQAvD_BwE
As a general rule, any contract that requires a completion of a job is priced in a local currency. In case you didn’t know, Chinese central bank restricts how much foreign currency you can take out of the country and you must pay local wages in local currency. It’s also difficult to more around the currency between Chinese banks. Almost all central banks restrict the use of foreign currency, because if they didn’t, most of the countries with weaker economies would end up using a dollar or a euro. Your claim that all contracts with Chinese companies are priced in USD are laughable. I’m speaking from experience - many years with international money transfers and international contracts.
That's right! So if they had a contract for $100 they still pay $100. But when China converts those dollars to yuan it gets more yuan than it did before.
How Foreign Exchange Reserves Work The country's exporters deposit foreign currency into their local banks. They transfer the currency to the central bank. Exporters are paid by their trading partners in U.S. dollars, euros, or other currencies. The exporters exchange them for the local currency. They use it to pay their workers and local suppliers. Purpose There are seven ways central banks use foreign exchange reserves. First, countries use their foreign exchange reserves to keep the value of their currencies at a fixed rate. A good example is China, which pegs the value of its currency, the yuan, to the dollar. When China stockpiles dollars, it raises the dollar value compared to that of the yuan. That makes Chinese exports cheaper than American-made goods, increasing sales. Second, those with a floating exchange rate system use reserves to keep the value of their currency lower than the dollar. They do this for the same reasons as those with fixed-rate systems. Even though Japan's currency, the yen, is a floating system, the Central Bank of Japan buys U.S. Treasurys to keep its value lower than the dollar. Like China, this keeps Japan's exports relatively cheaper, boosting trade and economic growth. Such currency trading takes place in the foreign exchange market. https://www.thebalance.com/foreign-exchange-reserves-3306258
More Yuan that is worth less And if I recall correctly rhe dollars are converted to Yuan during the transaction
Foreign exchange reserves, the currency valuation techniques have nothing to do with the subject of our discussion. You claim that international contracts are priced in USDs. Can you provide credible proof to your claim? Also, have you ever worked with international contracts? Have you ever done international wire transfers? I have, and in my experience, foreign contracts are priced in local currencies. Your claim that Chinas move accumulated them more USDs, on top of the tariffs is beyond absurd and go against all mass media crying about China dropping currency to reduce prices.