Economy .
After the failure of the war in Iraq, American government is practising positive policies to resume their economy. Unfortunatly, chinese "peg dollar" policy reduce the effect of amerian new policy. As a result, U.S. claimed that Renminbi should be revalued. However, appreciation of Renminbi will not be a definite good news for United States.
In last 10 monthes, the index of U.S. dollar has fell from 108 to 96 as the follow chart shows. .
(http://futures.tradingcharts.com/chart/US/W).
Evidently, United States want to improve their export by dollar depreciation policy. With more export, manufacturing might get renaissance and creat more job opptunity for American people. However, the fact is the policy of depreciation did not work very well to decrease the rate of unemployment. According the following chart from American Department of Labor, the rate of unemployment is still staying above the level of 6.0 after the depreciation of U.S. dollar. .
.
Source: Bureau of Labor Statistics, Current Population Survey.
At the same time, another major financial tool, interest rate has been cut constantly to excite the demostic demand as well. As can been seen in the following graph, the Customer Price Index has keeping decrease this year. .
Source: Bureau of Labor Statistics, Consumer Price Indexes .
Since the main financial implements could not improve the development of economy effectively, United States found a external reason finally, the undervalued Renminbi to explain their economic depression. "The Bush administration believes the way to deal with rising trade deficits is for other countries to remove trade barriers. That would allow US companies to do business more freely in overseas markets, thus boosting the US's global competitiveness." (Sapa-AP 2003) Obviously, United States consider Chinese Renminbi as the crucial reason that caused rising trade deficit and hefty losses of manufacturing jobs. On the surface, Chinese cheaper products did flood in U.