The hot news about Japan overtaking China’s third place does not stop there. More and more issues are bubbling up as more and more people are discussing about where these complicated economy situations will bring the two Asian tigers to. While Tokyo is having an awful headache about yen getting stronger, Beijing is adding problems by piling up yen worth around $5.3 billion, said the Japan’s Ministry of Finance. Moreover, China has already made $20 billion worth of yen investment this year makes yen much stronger than it should be at the same time adding risk to trading activities with Japan (The Wall Street Journal, 2010).Then, who is taking the blame?
While Yen becomes more expensive, China’s Yuan has dropped pretty sharp these few days. China’s economy model by keeping its currency low make the world thinks that there is a need of more strict currency regulations. “European leaders are no doubt anxious to see more Yuan appreciation”, include Germany. The strong Yuan will make Germany more competitive in term of its export to China. Hannes Hesse, Head of the VDMA Engineering Association also said that “Without China we would hardly have seen this (Germany) recovery – it’s a frightening trend.” It proves that China has bigger influences to the world's economy more than we can imagine. (The Economist Newspaper Limited, 2010)