Published in short form version in Star Advertiser, August 15, 2015 Saturday
Mr. Donald Trump's comment of China devaluation will devastate the U.S. is faulty. His exact words, "China has gotten rich off of us. China has rebuilt itself with the money it's sucked out of the United States and the jobs that it's sucked out of the United States."
First of all, China did not get rich off of us. The truth is United States used China to make money for the U.S. Investors by outsourcing manufacturing jobs to China. We made them rich while President Bush was having tunnel vision on Iraq. Chinese got richer by saving In a much higher rate than American and its domestic land reform.
Second, the Yuan devaluation seems arbitrary but necessary as the Yuan is still loosely pegged to the U.S. Dollars despite the Chinese official media denounces the U,S, often. The continuous rise of the dollar and other major currencies force China to do the inevitable. Although the falling Yuan may help its export to regain its fading luster and slow down its deflation by increasing the domestic cost of living, the economic impacts to China outweigh its benefits which subsequently trigger a massive outflow of capital back to the United States and Europe. Isn't Mr. Trump just sold an apartment for $15 millions to somebody from China as he disclosed says it all? In simple term, we buy cheap, sell high and get our money back at the end. How devastating could that be?