IJCH 2016 Vol.2(1): 40-45 ISSN: 2382-6177
doi: 10.18178/ijch.2016.2.1.034

Regarding the United States' Currency Strategies and Their Effect on the Chinese Economy

Guanghua Chen, Dan Zhao, and Junyu Tang
Abstract—The international reserve-currency status of the US dollar and the loose monetary policies of the United States inevitably entrap the US government into the Triffin Dilemma. Under the pressure caused by the dilemma, the US government releases so much liquidity that results in a greatly serious damage to the faith of the US dollar and the real economy of the United States. In order to gain the advantage in the new round of economic competition, the United States will not hesitate to compel the RMB appreciation which is regarded as the breakthrough point for the purposes of promoting real economy,increasing export and maintaining the international reserve-currency status of the US dollar and the international leadership of the United States. By analyzing the implementation process and path of the US currency strategy, this paper goes deeply into the procedure and technique of the US currency strategy against China, and concludes that the US monetary policy serves the following two purposes: the first is to reduce and eliminate the pressure of US government’s periodical debt repayment on a global scale as much as possible, the second is to utilize the US dollars to maintain and consolidate its competitiveness, initiative and power of control over the global wealth and resource allocation by the comprehensive application of political strategy, military strategy and cultural strategy. Under such influence, some Chinese economic policies in the past ten years are incontrollable or invalid; the “New Normal” of Chinese economy emerges. In order to ensure the sustainable economic development and go over the difficulties of the so called “Three-phase Superposition”. It may be a wise choice for the Chinese government to focus on the core national interests and adjust well the relationship with the United States aiming to the strategic cooperation and competition in politics and economy, which is also the essential condition for China to better make the monetary policy more effective.

Index Terms—Monetary policy, regulation, financial crisis.

The authors are with Tianjin University of Finance and Economics Law School, 300222, Tianjin, China (e-mail: sunfighter@126.com, placebo0719@126.com, junyuaa@126.com).

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Cite: Guanghua Chen, Dan Zhao, and Junyu Tang, "Regarding the United States' Currency Strategies and Their Effect on the Chinese Economy," International Journal of Culture and History vol. 2, no. 1, pp. 40-45, 2016.

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