Final answer:
An undervalued Chinese yuan is an ethical issue because it creates unfair trade advantages for Chinese manufacturers while harming international competitors, potentially leading to global trade imbalances, job losses, and economic hardships in other countries.
Step-by-step explanation:
An undervalued Chinese yuan is considered an ethical issue because it can lead to unequal economic advantages and potential negative impacts on global trade and employment. When the yuan is kept artificially low against the U.S. dollar, Chinese exports become cheaper in the global market, benefiting Chinese manufacturers and contributing to their economic growth. However, this practice can be detrimental to international competitors, leading to job losses and economic hardship in other countries, where industries cannot compete with the cheap imports. The ethical concerns rise around the exploitation of this currency manipulation, which may contribute to unfair trade practices and are linked to broader issues such as labor rights and environmental degradation.
Those who benefit from an undervalued yuan include Chinese exporters and multinational companies that rely on cheaper manufacturing costs in China. Conversely, workers and businesses in other countries, especially in sectors directly competing with Chinese products, may suffer from price undercutting, resulting in job losses and company closures. Additionally, the practice may incite trade tensions and retaliatory measures from affected countries, further complicating international relations.