Under-valued Yuan, trade deficits, counterfeiting, etc. all amount to major friction between the U.S. and China

Is China a currency manipulator? Many argue yes. And that may give the rising superpower a trade advantage. A big one. A recent Reuters article opines that the trade deficit between the United States and China is well over $250 billion.

China, until recently had pegged it's Yuan to the U.S. dollar and had under-valued its currency, giving Chinese exporters a trade advantage, according to many trade/economic experts. Many criticize President Obama for not being tougher on China by forcing China to properly value its currency, or by assessing tariffs on Chinese imports that would then make comparable American goods more appealing to consumers. President Obama has indicated he prefers to deal more diplomatically with China rather than try to strong-arm them, according to a recent Reuters report.

The same report points out that U.S. debt levels are a concern for China, especially because China holds billions of dollars worth of U.S treasuries.

Piracy and counterfeiting of American goods by Chinese manufacturers is an enormous concern. Much of the Chinese economic rise rests on the laurels of American companies like Microsoft whose software products are routinely bootlegged; and on other American companies' goods that include but are not limited to DVDs, handbags and shoes. The Chinese government has promised to implement tougher controls.

We'll just have to see how that goes. Read more.