THE LEGISLATIVE DEMAND FOR THE REVALUATION OF YUAN MAY STRAIN TRADE AGREEMENTS AND RESULT IN DEVALUATION OF THE UNDERVALUED CHINESE CURRENCY.

Chinese government reluctancy to further strengthen the value of its undervalued currency the yuan has resulted in the unanimous support of the bill in the Senate that may be enacted to a legislation. This bill, if enacted to a legislation may strain trade agreements between the two world's major trade partners the USA and China, besides the European Union. China's reaction on the other hand regarding the USA and the Western European countries insistance on their request for the revaluation of yuan, despite the recent 2% increase in the currency value has not been made known.
However, if the USA implemented the legislation, China's exports to both the USA and to the Western Europe may dramatically fall resulting in further devaluation of yuan, rather that the required increase in value of yuan demanded by both the USA and the Western European countries.

Written by Godfrey Ohia.