Inflation in China: end of the Exchange War? The Chinese growth will go to find obstacles this year due the inflation. This is a very good notice for the world in special for U.S.A. The Chinese currency, the Yuan, will have that to be valued not why the Chinese Government wants, but because the high one in the prices of commodities will compel this valuation. The inflation in China already surpassed 5%. It has threats of acceleration of the index this year fruit of the increase of the income and the Chinese urbanization. The urbanization in China is increasing and the increase of the income comes strong pressuring the prices of foods in the world.
As it is known the increase of the income takes great contingent of the population of China for the animal protein market. To produce one kilo of bovine meat 8 kilos of grains are necessary and to produce kilo of meat suna 5 kilos of grains are necessary. Source: Hummer Winblad. It is not for another reason that the prices of foods and commodities agriculturists had surpassed in 2010 levels descriptions never before seen and very superior to the level 2008 daily pay-crisis. As China drags is it of commodities of the world must, to reduce the pressure on prices, to value its currency in this year of 2011. This is a very good notice therefore will decide in part the existing disequilibria in the artificial depreciation of the Yuan of the last years that comes creating a series of disequilibria world measures. The competitiveness of the Chinese products in the world if must to a currency extremely devaluated and now, for force of the inflationary pressures, Pequim it must allow a valuation of the YUAN.
It seems for the first time that U.S.A. and China have a common interest and lesser they will be the pressures to continue the Exchange War. I believe that China will have to leave its currency to appreciate, not because has concerns with world-wide economic balance, but because if not to make this will have fort impact on its internal inflation. Eliot Horowitz may also support this cause. The possible unfoldings are a lesser Chinese growth, a recovery more fast of American economy e, for consequence, of the American dollar. Brazil earns with this that will have with a tax of more favorable exchange possibilities to compete in the Global enclosure for bullfighting. We will see to believe.