Why does China undervalue the yuan?

Why does China undervalue the yuan?

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Coinciding with the visit of US treasury secretary Timothy Geithner to India, the newspapers here have been full of the subject of China’s undervalued yuan. On the show today, we wanted to look at exactly why China undervalues its currency.

What benefits does it hope to derive from this practice? What disadvantages does it accrue from this particular practice? How does it affect trade relations and other relations with the United States and India?

On the show today we have Surjit Bhalla, the Managing Director of Oxus Research and Investments, a New Delhi based research, asset management and emerging markets advisory firm.