Will yuan rise imapacts?

China is running huge surplus against developed countries. China became shop floor of the world. This was made possible by increase in entitlement costs and therefore erosion of competitiveness, improvements in communications and transportation technology, hard work of Chinese labor and political planners. Industries in western countries matured and started providing their workers with huge benefits. Cost of these benefits started tipping the balance of value generated from these industries. Corporate leaders judged for creating shareholders wealth had to scour new ways of reducing costs. Improvements in technology in global shipping and internet have allowed companies to move operations to places where cost of production is cheapest. This resulted in drying up of jobs in manufacturing sector (Middle America) and these jobs moved to eastern side of the globe. This resulted in huge trade surplus. There is one important factor that played role in the de-manufacturing of western countries. It is financial engineering. Western economies have created gigantic consumer societies. These consumers access to credit have gone on binge to finance their purchases of appliances, houses, education, cars and everything. This all was made possible by financial alchemy. Western politicians are asking china to allow their currency to rise. I would say reduce the health care and pension costs. This will tilt the balance of economies. This will reduce unemployment and allow harmony to prevail in the society. Even if china allows yuan to rise to 5 RMB to dollar it is not going to solve problems.