As we all know, China is a communist country and has a huge population that could affect the US dollar. With the Forex Reserve Diversification, China will gradually discard some of its stocks in the US Treasury Securities, through this; the value of the Dollar will be minimal as China suffers the US businesses and consumers by unloading US Treasuries from the market. This is also true with Currency Manipulation. Chinawill manipulate the currency with theUS-China trade because it will produce more products for other countries rather than the US.
Direct competition with US exports also has a tremendous effect on the US dollar. As the wide variety of technologies of America arises, China also made more efforts to come-up with American technologies at lower costs compared to America’s products. Limiting import products is also affecting the US dollar.
Pressuring the wage is another factor as the Chinese government gives advantage wages to Chinese workers. America will also compete with it for they have the majority workers based on population. This also applies with raw material pricing. Most of the materials used nowadays were made from China and they could manipulate the price if they want to.