Raymond Richman - Jesse Richman - Howard Richman
Richmans' Trade and Taxes Blog
China riggles off the hook
Yesterday the Chinese government let the yuan strengthen 0.4% vs. the dollar. The yuan-dollar exchange rate went from 6.83 yuan to the dollar to 6.79 and U.S. stocks boomed. Then the Chinese government weakened the yuan back to 6.82 and U.S. stocks fell. Here's the relevant sentence from the Associated Press story:
Congressional pressure for a change in Chinese exchange rate policy was building, but the Chinese government riggled off that hook, easily, through an insignificant strengthening of the yuan.
As I pointed out a few days ago (Congress plans ineffective action against Chinese mercantilism), there is no need to keep letting China off the hook. The real problem is China's mercantilist strategy of maximizing exports and minimizing imports. Congress could end that strategy, once and for all, simply by requiring balanced trade. I wrote:
Journal of Economic Literature:
Atlantic Economic Journal: