Thank You For China! Thank You For Letting RMB So Cheap!

My family lives in Losangeles.

Like many other people in Losangeles, I often go to Vons, Ralph s or Albertsons supermarket to buy milk. Ralph, Ralph.

But now it is different.

Not long ago, a nearby Taghit supermarket began putting groceries on shelves, including milk.

The ordinary milk of Feng, Ralph or Albert Sen supermarket is 3.5 dollars per half gallon, while organic milk in Taghit is only 3.13 dollars.

Like my middle class neighbors, I soon abandoned the grocery store I used to go to Taghit to buy groceries.

No one complained about selling cheap milk in Taghit.

Jonny, a neighbor who lived with me, worked in Feng's dairy department.

Although he was dismissed, he did not complain about Taghit.

Today, Jonny also went to Taghit to buy milk.

In fact, he bought a lot of organic milk in Taghit and made organic biscuits in a donut shop shortly after his opening.

His business is booming.

Jonny bought so much organic milk, and because his son Mickey drank a lot of milk, he was overweight.

Jonny did not complain that Taghit sold milk at a price lower than Feng's. nor did he blame Taghit for Mickey having drunk so much milk.

Why can Taghit sell milk at such a low price? People are puzzled.

Perhaps it is because Taghit has a better supply chain management system, or its shareholders are willing to give up profits, or their employees are very low wages, or Taghit supermarkets hide a giant cow in a dark room.

But no one really cares about what causes or complains.

Why do we complain that China sells cheap clothes, Christmas ornaments or chicken breasts to us? We have accused China of selling cheap goods to us because the wages of Chinese workers are very low.

The reason why we blame China is that China has been holding down the RMB exchange rate.

We blame China for overspending and over borrowing, because the goods that China sells to us is too cheap.

We have created a very profound word "global imbalance" to describe our over consumption and over borrowing.

We blame China for its responsibilities.

We put pressure on China to revalue the renminbi so as not to sell cheap goods to China again.

We are like gluttony. The habit of over eating is too entrenched to control.

The only way to eat less is to ask the restaurant to sell us higher priced food.

We call this process the "rebalancing" of the global economy.

Jonny likes the cheap goods made in China very much.

He buys cheap clothes for children in Taghit supermarket, decorates his donut shop with Christmas ornaments.

By the way, these Christmas decorations are all imported from China.

To tell the truth, if Jonny can't buy cheap chairs, cheap cookers and cheap kitchenware made in China and cheap in China, then he can't buy the cheap and cheap kitchenware made in China.

If we do not complain about cheap milk in Taghit, we should not complain about cheap clothes, cheap Christmas ornaments, cheap chicken breasts and cheap money in China.

Yes, cheap money.

These beautifully printed China

Therefore, I would like to thank China for selling cheap goods to us.

(Note: Chen Baizhu, Professor of Finance and business economics, Marshall School of business, University of Southern California, senior research fellow, Institute of Finance and finance, Chinese Academy of Social Sciences, chief economist of Shanghai Han century venture capital management company, President of the former China Association of economists, and academic director of the global business management program of Marshall Business School).