Recently, the banking and finance issues have become the hot-spots of the political debate.In particular, opinions differ on the issue of raising the value of the Chinese yuan (i.e. Chinese currency RenMinBi).In the traditional Chinese economic theory, raising the Chinese yuan would result in more unemployment and economic recession.Such a view may be called "being overshadowed by a trivial leaf, thus unable to see the great mountain ahead." The result would indeed happen, but only as one aspect of several results, not a global result. In fact, it might not be the real result. We all know that Chinese medicines are poisonous, but you might not be poisoned when you drink it. With several medicines combined together, or in the right dose, the result might not be poisonous but beneficial. This analogy is similar to a government adjusting its economy.

First, let us look at the exchange rate of the Chinese yuan. Looking at this issue abstractly, it is quite simple: doing the same work in China as in the USA, the Chinese wages are lower. One could say that Chinese wages are underrated, while USA wages are overrated. However, in reality, this issue is not that simple. Various jobs cannot be compared under completely the same conditions. Different social environments, different manufacturing techniques, different market environments, different social systems, different credit classes of the social morals, could all affect the values of the work differently. Reflected in the foreign trade is the different purchasing power of these wages, which are separated into two parts: one is the absolute value of the wages, the other is the exchange rate of the currency.

When part of China's manufacturing conditions are improved, which is to say that the Chinese working productivity goes up, then the Chinese wages relative to the USA wages go up and thus change the related values between the USA and China. This change could be accomplished by either raising the wages of the Chinese workers or raising the exchange rate of the Chinese yuan over the dollar. Generally both would happen simultaneously. The Chinese government should raise the Chinese yuan's exchange rate according to the difference in the wages of the two countries, for a relative balance. Such an adjustment would enable all the people to enjoy the result of economic growth together. Naturally, the Chinese market would also expand with this economic growth. This outcome is necessary for China's future economic development, and would also be advantageous to America's economic development. It would be unlikely to produce big trouble.

However, the above economic theory has for its goal the development of a society and its people. The Chinese government holds a different theory of economic development, which it called "let some people get rich first." This theory is really a theory for getting rich by exploiting the rest of people. According to the country moneybags philosophy of the Chinese Communist leaders, in an effort to let some people get more money, one must make the rest give up theirs. "Too bad, you may use your theory of shared wealth to deceive people, while we openly state that to get rich, we must allow exploitation." Most of the so-called economists inside China are going along with this train of thought of the masters for the emperors. So regardless whether they were against or for the current economic model, their mindsets are similar.

How to get rich? The easiest rule is to buy low and sell high. This way will make excessive profit. How does one buy low and sell high without too much work? By maintaining a low Chinese yuan against the US dollar and keeping Chinese workers' wages low, one can produce super low-priced products in China and sell to the high valued markets in the USA. Every minute will make huge profit. The American consumers will be happy for the cheap products and give support for this policy. Some American workers will lose their jobs and be very unhappy. Thus, it is important to buy in American capitalists and also through them to buy in American politicians to maintain this kind of unfair trade policy. One must let the American capitalists benefit, to allow them the opportunity to make their own excessive profits. Then naturally, they will spare no effort to help the Chinese government to maintain this unfair trade.

This wealth is the mutual wealth of both businessmen and officials of China and the USA, instead of the mutual wealth of the people. Chinese people are not getting wealthier, while American people are getting poorer. In contrast, the businessmen and officials in China and the USA are getting wealthier and wealthier. The disparity between rich and poor of the whole world is obviously getting larger. More and more wealth turns money around, yet the relative production and consumption of material wealth is declining. This is the reality for the present economic recession.

To change this deformed economy we must change the Chinese government's policy first. There is no shortcut, but to raise workers' wages on one side while raising the Chinese yuan exchange rate against the US dollar on the other side. By doing so, we could recover a balance in the differences between the Chinese and the American labor forces, as well as recover a balance in the China-US trade. When the turnaround of the money and material wealth recovers a balance, then the global economy might be able to get on the right track. After all, the essential base of the economy is the production of the material wealth, while the money itself is just the reflection of this material wealth. Or, using an obscure term of the scholars, it is "equivalent".

Some friends would ask: what is a "balance"? Please give us a group of numbers or equations. I cannot give it to you. Neither can the economists of the world, unless they want to cheat you. The turnaround of the market is dynamic and changes happen in response to every participating factor. Nevertheless, every parameter is different, so we can only calculate roughly, instead of accurately. Given a small change in currency value, we could estimate the degree of market change, and then estimate the degree needed for further improvement. We could reach an approximate balance, but there will not be an absolute balance. We could only continuously try to maintain a balance, but there is no way to invent a way that does it once and for all.

Nowadays, the US government says it is not balanced, while Chinese government says it is balanced. That is purely for political argument, instead of talking rationally. To talk rationally, one must acknowledge the reality of the imbalance, which does not need to be argued. Obviously, the Chinese Communist government is acting perversely, while the Chinese people are the biggest victims. So the Chinese people have their reason to be against this government. The intellectuals who have conscience should be on the side of the Chinese workers who are on strike. If the strikes by the Chinese workers are successful, then it would not only rescue the Chinese workers, but also the American workers, along with the world economy.

Similarly the US government should push for the rise of the Chinese yuan. If it is successful, it will not just rescue the US economy, but also the Chinese economy, and thus the world economy. After all, we all know that the US-China trade affects the world economy. The economic recession happened from that trade, thus the economic recovery naturally should start from it. However; we should not underestimate the wealthy people's influence in this world. Of course they want to make excessive profits. Nevertheless, a chaotic and declining world is not a good thing for them either. After all, they are not living in a vacuum.

Wei Jingsheng