ch 8

From what I understood of Dodson’s chapter 8, the Chinese government differs from the governments of the countries in the rest of the world because they do not let their currency, the yuan, flow in the economy to set its own value. Instead the Chinese set the value of their currency at a really low rate so that countries, like the US, come to them for cheap goods and production. China also lends out tons of money when countries, like the US are in need in hopes of gaining a benefit, when really they are hurting themselves. Although, when I first started reading about these two strategies, I thought of China as very smart in doing them, reading further showed me that this causes many problems for their economy, for example in the stock market. Chinese stock markets are considered a dangerous gamble because the government is so controlling that it could and does change the rules at any time. It also causes their banking systems to be poor. Their government doesn’t offer interest more than one or two percent in bank accounts, only in unstable situations like property and the stock market. Dodson predicts that China will have to change in the future and become a little less controlling of the flow of money in their economy, but I’m not so sure that they will be willing enough to let this happen. Reading this chapter made me think that if everything were to play out right for the outcome of Chinese currency, that they could potentially become the one of the world’s leading economies.