China’s Pegged Currency

Read the case study “China’s Pegged Currency” on p. 701 in Chapter 22 of International Economics Theory and Practice.

According to published reports, China today manufactures more goods for global consumption than any other nation. As a result, its foreign currency reserve as of January 7, 2016 stands at $3.4 trillion (IMF) compared to $118 billion for the United States. According to this metric, China ranks number one while the US ranks number 18. Most analysts attribute China’s massive accumulation of reserves to the pegging of its currency to the US dollar as discussed in the case. Critics call this currency manipulation on the part of China.

Analyze in a minimum of 1,050 words, using this case study as the basis, the impact of currency manipulation on cross-border trade and investment activities.

Cite a minimum of 3 peer-reviewed references from the University Library.

Format assignment consistent with APA guidelines.

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