Monday, October 03, 2011

More on China's Currency

"In substantive terms, there is little to be gained from high-profile pressure on China to accelerate the pace of RMB appreciation, since the United States possesses no leverage which can be plausibly brought to bear. U.S. policy should therefore de-emphasize the exchange rate, and instead focus on keeping the pressure on China to maintain and expand market access for American firms in the domestic Chinese market, which in principle is provided for under the terms of China’s accession to the World Trade Organization."

~From the Brookings Institution, "China's Currency Policy Explained"

MP: Note in the graph above that China has allowed the yuan (dollar) to appreciate (depreciate) by more than 20% since 2006.  

HT: Scott Lincicome

4 Comments:

At 10/03/2011 4:38 PM, Blogger James Wilson said...

How does a State devalue its currency, aside from inflation?

 
At 10/04/2011 9:15 PM, Blogger sethstorm said...

Still not good enough to justify anything except a bill that tacks on a large penalty to China.

 
At 10/05/2011 10:41 AM, Blogger Hans said...

Should it not be +21%, rather than a minus??

 
At 10/05/2011 11:21 AM, Blogger Mark J. Perry said...

It's a -21% depreciation of the U.S. dollar, since the units quoted are Yuan/USD.

 

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