Question

From the vantage point of China, is an under-valued currency a good thing? Explain. [Remember that an under-valued valued currency makes imports more expensive and exports less expensive.]

Answer 1

The China economy is the strongest economy world the availability of the cheap economic resource and optimally utilizing these resources made this country to compete with European and The USA country.

The devaluation of the currency of any country make import expensive and reduce the imports the country devalue their currency against foreign currency when there are trade imbalances.

In the context of China, devaluation makes importin goods from from the china cheap and it will lead to capturing the market because of China goods competitive in global market.

Thus, devaluation of favouravbe for the China.