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How is Chinese currency different than the U.S Dollar?

Chinese use Renminbi, which consists of Yuans, the equivalent of 10 Jiao, that can be divided into 10 fen. It’s similar to dollars, and having different amounts of paper bills. Their paper money is distributed by 1.5, 5, 10, and 50 values. In hotels and department stores you may pay with a credit card however credit cards are not accepted in stores or restaurants, where as in the U.S you can pay cash or credit almost anywhere.
Currently both United States and Chinese currency are at the same value in the international currency market.

reference: www.danwei.org/china_information/china_currency_trade_revaluati.php

China Economic boom

Economists studying China face thorny theoretical and empirical issues, mostly deriving from the country's years of central planning and strict government control of many industries, which tend to distort prices and misallocate resources. In addition, since the Chinese national accounting system differs from the systems used in most Western nations, it is difficult to derive internationally comparable data on the Chinese economy. Figures for Chinese economic growth consequently vary depending on how an analyst decides to account for them.

Although economists have many ways of explaining--or modeling--economic growth, a common approach is the neoclassical framework, which describes how productive factors such as capital and labor combine to generate output and which offers analytical simplicity and a well-developed methodology. Although commonly applied to market economies, the neoclassical model has also been used to analyze command economies. It is an appropriate first step in looking at the Chinese economy and yields useful "benchmark" estimates for future research. The framework does, however, have some limitations in the Chinese context.

Original data for the new IMF research came from material released from the State Statistical Bureau of China and other government agencies. Problematically, the component statistics used to compile the Chinese gross national product (GNP) have been kept only since 1978; before that, Chinese central planners worked under the concept of gross social output (GSO), which excluded many segments of the economy counted under GNP. Fortunately, China also compiled an intermediate output series called national income, which lies somewhere between GNP and GSO and is available from 1952 to 1993. After making appropriate adjustments to the national income statistics, including adjusting for indirect business taxes, these data can be used to analyze the sources of Chinese economic growth.

Why Is China Growing So Fast?

In 1978, after years of state control of all productive assets, the government of China embarked on a major program of economic reform. Before 1978, 4 out of 5 Chinese worked in agriculture. After 1994, only 1 out of 2 Chinese worked in agriculture. That is very impressive result after the China governments reform their productive policy

After 1978, Chinese started to build factories and started to import all the machines to manufacture products. Most people in China worked in agriculture and with very low income. Since there’s 1 billion of population in China after 1980’s and all of them wanted to earn more money, therefore cost cheap labor for factories. That’s why China’s economic grows so fast!

References:
http://www.imf.org/external/pubs/ft/issues8/index.htm

Has China's economic boom truly helped China?

With a new and ever-changing civilization, the face of China seems to be getting stronger. It's economy is consistently improving the nation and its way of life. This economic boom has equipped the Chinese with trains that run at around five hundred miles per hour, a supercomputer so powerful it demands twelve megawatts of power, and of course nuclear weapons.
However, that is the part of China that is changing, making the news, and by the sea. China is an enormous country, like the US, it has vast countryside, laced with plains, deserts, and not to mention the mountains. The inland China remains mostly unchanged. It has at least 150 million people below the poverty line, which is nearly half of the people in America.
In conclusion, the boom has helped those in China that live by water, much like the industrial revolution of the 1800's. However, for those that live away from the ocean, they have yet to see any benefit from this development. Will China reach out to its own starving people?
Source: http://www.un.org/News/Press/docs/2010/sgsm13219.doc.htm

Relevancy?

If you've been living under a cave for the past couple of years (or just ignorant) this might strike you as strange. An economic boom in China? Its relevancy to the American economy may seem as trivial as a lunchtime choice between pb&j and tuna salad. Unfortunately for you, that tuna salad cost you both one lunch-card swipe and an upset stomach - metaphorically speaking. China's economic effect on the United States is more than just a passing phase, as it has pressed upon the United States economy since the late 1980s, if not before that.

Theories have sprouted out and about since the early 2000s with speculation over what the economic boom in China will do for the global environment, many leaning toward the negative:

"China is becoming the sucking force, taking raw materials from across the planet, because it alone doesn't have the resources it needs to sustain its growth"

Their predictions prove to be but words as China has made its name known to be the superpower of the global economy.

In the modern world, China is the fastest-growing economy, with average growth rates of about 8% every year over the past 30 years (in GDP). Still think that this all a numbers game? Think about it this way: Americans have grown dependent on China to provide cheap imported goods that help push up the standard of living. Any abrupt shift on the part of Beijing would threaten the stability of the US currency, considering that about two-thirds of China's foreign currency reserves are denominated in dollars.

Now look for something in your house that doesn't have 'Made in China' imprinted on the back. I'd like to see you try.

What do you think that make China currency remaining stable ,instead of revaluation?

While China has maintained the growth and increased the GDP,China could increase it's export and increase it's foreign reserve to the country that should make the China's currency to become stronger.

But stronger currency could increase the price of Chinese export goods and would hurt a Chinese exporter in the future.In fact, China tries to keep it's currency stable not to be revalue, which should make the market imperfect comparing with it's growth, that's the reason why the United State thought that the stable of Chinese currency is not reasonable and should be revalue at this point.While the economic of China keep growing but the currency remains unmove, that keep the price of goods exports from China remain at the low price and still maintain it's export volume to foreign importer, especially the United State which is the big market of China, That's why the US keep trying to make the Chinese currency to be revalue.

One of the strategy to resolve this problem,Is if the US try to increase the liquidity of US dollar in the international market in order to keep the pressure of the foreign exchange of US dollar against other major currency(e.g Renminbi,Yen,Euro etc.),that could make the US dollar to become more weaker.The strtegy is called Quantitative Easing (QE2) that just recently issued by the federal reserve of the United State.

References:

Professional from Banking Institution
Http://www.imf.org/external/pubs/ft/issues8/index.htm
Http://www.allvoices.com/contributed-news/7246987-china-and-us-quantitative-easing-2

Further Question

Would the Renminbi be devalue against US Dollar in the future?

How can you compare the current recession in the United States to the economic boom in China?

Because of the United States current recession China's economic has increase because US businesses are now using China as their main manufacturing site.Helping stimulate China's economics.


http://www.fas.org/sgp/crs/row/RL33604.pdf

Report by CRS(Congressional Research Service) talks about various aspects US - China economic relations.

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"This blog is about "China Economic Boom (currency devaluation)", Which refers to the situation when the currency of China should become revalue due to economic growth and maintained the most foreign reserve in US Dollar in the world, but China's currency remained stable instead , causing by the foreign investment which keep rising in China.

We are interested in this topic because of the current controversy between China and US, which both are the most purchasing power in the world's market, Concerning the exchange rate between US dollar versus Yuan.

We are concerning if Yuan would become more revalue (or stronger) base on market mechanism against US Dollar. This blog is created to gather all the point of views from various references regarding the international trade between these two countries".