*With the fastest growing major economy in the world, the communist rulers of China have begun to throw their weight around when it comes to international finances.
One of their deeply held beliefs is that the world relies too much on the American dollar and that reliance needs to be lessened.
Thus, the Chinese do not so much want to use their currency – the Renminbi (also known as the yuan) – to overthrow the global dominance of the dollar as they want to reduce the significance of the dollar when it comes to international trade.
Robert Minikin – a senior currency strategist at Standard Chartered in Hong – was recently quoted as summarizing the Chinese concern this way: “China sees the global financial system as too U.S.-centric and dollar dependent.”
China wants to change this and it is slowly doing so. Recently, a Moscow securities exchange opened direct trading between China’s renminbi and Russia’s ruble. If this market develops, the ultimate result will be to eliminate the dollar from a large portion of Chinese-Russian trade. Look for China to strike similar deals with India and possibly Brazil. Further, in the past decade China has invested massively in Africa and may soon begin to push the Africans to hold their reserves in the renminbi instead of the dollar.
What does all of this mean for Black America? It means that those thousands of manufacturing jobs America has lost to China’s cheap labor over the last decade are gone for good. This will help to keep the Black unemployment rate high for years to come. China will surely continue to manipulate its currency such that its goods remain cheap and its people remain employed.
Remember: When the value of a country’s currency rises, the cost of its goods on the international market also rises. Thus, all the talk you hear about the Obama administration forcing the Chinese to allow the value of their currency to rise is just that – talk. China will keep the value of its currency cheap and thus keep jobs in China.
It will be virtually impossible for small American manufacturers – the ones most likely to hire minorities – to compete with China’s cheap labor and cheap currency. Blacks will bare the burden of Chinese economic policies via lingering levels of high unemployment.