The Exchange Rate of Renminbi to US Dollar

The official exchange rate of Renminbi to US dollar is essentially reflected in China-US trade items, such as clothing and luggage, tires and toys, electronic products, and bulk raw materials.

However, for daily life services which have little to do with international trade, such as public transportation, postal express, medical education, leisure and entertainment, restaurant takeout, public security and fire protection, litigation and justice, the real value of Renminbi takes a major departure from the official exchange rate.

In these domains, the ratio of Renminbi to US dollar might be even less than 2:1.

Taking into account the large proportion these elements hold in individuals’ lives, there isn’t as significant a disparity in living standards between Chinese and American citizens as some might assume.

In fact, in many aspects, particularly those pertaining to food, clothing, education, medical care, and public transportation, China evidences a substantial advantage over the United States. Therefore, according to ‘purchasing power parity,’ Renminbi’s ‘value’ would be significantly ‘appreciated’.

For this reason, the lower class who primarily consume frozen foods, utilize imports from China, shop at stores like Walmart and Cosco are the true beneficiaries of spending US dollars for Renminbi. However, the downside is that the lower class lives in conditions comparable to unseen daylight - isolated and unseen.

The moment they seek social interaction - be it dining out, procuring psychological counseling, or even hiring a technician to install an air conditioner - anything involving human services interferes, and the US dollar exchange rate drops significantly, mimicking or even falling lower than that of the Renminbi. This indeed represents a class divide, yet at the same time, it reveals the fundamental reason why the US cannot decouple from China.

The American claim that 700,000 families would lose job opportunities due to ‘decoupling’ from China is a gross underestimation. Not to mention the understated number of lost job positions, but going as far as to consider the tens of millions of Americans who are left without meals, clothes, unable to afford mobile phones or computers, or cars without access to Chinese goods. And this isn’t even taking into account the undocumented immigrants.

We can envision a future where the term ‘supermarket’ becomes extinct in the United States, where paying for ham with a shotgun becomes a necessity due to lack of fiscal resources.