US congress and other political bigwigs might be pushing China to appreciate its currency, but Shaun Rein asked US companies, and they see their interests hurt by a rise of the Renminbi, he writes in Forbes:
The next time you hear someone in Congress push to appreciate the renminbi, ask them why they would want to make prices higher for everyday Americans at Wal-Mart and take away profits for American workers when they need it most. That endangers America’s economy as well as China’s.
Yes, you are reading this correctly: a rise of the Renminbi hurts US interests. Shaun Rein recalls a recent meeting with the president of one of his clients:
I asked him what he thought about Congress pushing for appreciation of China’s currency, the renminbi, or yuan. His immediate answer: “It would be the worst thing for my company.” (His company is 100% owned by Americans, by the way.) First, he said, an appreciating renminbi cuts into his company’s profits, which lowers bonuses, salaries and dividends for employees in the U.S. Why would anyone want to lower the profits of American companies during a financial crisis?
Second, an appreciating renminbi also would not save American jobs, he argued: “That saving American jobs argument is ridiculous.” Companies would “transfer production to lower-cost places like Vietnam or Indonesia.
More in Forbes, including observations on the threat of a trade war.