According to Professor Zhang Tianliang, the Central Bank of China has decided to reduce interest rates on the yuan to increase liquidity for this currency. This action contrasts with the central banks of many countries worldwide, including the United States.

Zhang argued that this act of the Chinese Communist Party (CCP)’s regime would not improve anything but make things worse.

Zhang pointed out that the yuan will continue to decline as the public tends to hoard more U.S. dollars as interest rates on the U.S. currency rise.

The professor said on the Dawn Time program that China’s devaluation of the yuan is not good. When a country’s currency depreciates, inflation rises, and prices rise accordingly.

Zhang added in theory, the yuan’s devaluation gives the impression that it benefits Chinese exports. But in reality, that’s not the case.

He explained that if the products are made entirely on the Mainland, a decrease in the yuan value will lower the prices of exported goods, increasing the competitiveness of Chinese goods.

However, China’s exports are now dependent on foreign raw materials, so when the yuan depreciates, what China can only gain is to take advantage of cheap domestic labor.

But even with this unique advantage, China is threatened when cheap labor from neighboring countries such as Vietnam or India creates great competitiveness.

That’s why many big manufacturers are relocating their factories to Vietnam. For example, Apple has started manufacturing iPads in Vietnam, along with Google’s Pixel. Meanwhile, Amazon has also relocated part of its production line from China to India.

Zhang believes the Chinese economy is in great danger. Any policy changes by the CCP will only be a vicious cycle like the current yuan devaluation policy, with no exit. So, according to Zhang, as long as the CCP rules China, things will only worsen.

However, there is still a way to save the situation. And this is the only way: CCP needs dissolving, Zhang suggested.

Zang said the CCP officials were corrupt and laundered the corrupt money by sending it abroad. If the CCP disintegrates, this massive amount of money can be used to save the Chinese economy.

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