Chinese Currency Manipulation has been a favorite bashing point for Trump throughout the campaign season. Trump reports that the US is "losing big" and that China is cheating its way in global trade, but his accusations just don't hold up. What Trump means when he references currency manipulation is devaluation, which is the official lowering of the value of a country's currency within the foreign exchange system to that of another country's. In this case, it's China with its Yuan. Why would a country want to reduce the value of its currency? Simple. Currency Devaluation means that the country is able to sell its goods at a much cheaper price to another country and thus is able to generate a trade surplus with that particular country. This is evident in the case of China and the United States as a lowered Yuan permits for there to be a vast trade defecit. Trump is wrong however when he points out that China is devaluing its currency. In fact, China's central bank is trying to keep the currency stable. What Trump mistakes as devaluation is in fact, depreciation.

Depreciation is when market forces coerce a country's currency value to dip. This is true in the case of China who has reiterated it wants its currency stable in efforts to transition into a service based economy. The country still has a long way to go in terms of stabilizing its economy as Xi Jinping, the President of China, faces local backlash to his numerous economic reforms. Only time will tell if the Yuan will revalue itself and break itself from the chains of market foces.