{"id":405886,"date":"2010-03-08T11:17:20","date_gmt":"2010-03-08T16:17:20","guid":{"rendered":"tag:www.economist.com,21005237"},"modified":"2010-03-08T11:17:20","modified_gmt":"2010-03-08T16:17:20","slug":"china-doing-its-part","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/405886","title":{"rendered":"China doing its part"},"content":{"rendered":"

Back in February, the Census Bureau reported that America’s trade deficit continued to grow with recovery. I pointed out<\/a> at the time that this wasn’t due to an increasing American deficit with China. American exports to China have actually been quite strong. Opinionators banging the drum for renminbi appreciation against the dollar, and calling the currency peg protectionist, should take note.<\/p>\n

Meanwhile, it seems that the peg hasn’t prevented<\/a> China from beginning to rebalance its economy, either.<\/p>\n

\n

Top Chinese officials said the nation\u2019s trade surplus is shrinking and urged caution in exiting crisis policies, suggesting that the yuan may not appreciate soon against the dollar.<\/p>\n

The surplus slid 50.2 percent in January and February combined from a year earlier, Commerce Minister Chen Deming said at a press briefing in Beijing on March 6…<\/p>\n

The figure disclosed by Chen suggests that February\u2019s trade surplus was about $8 billion, compared with about $14 billion in January and about $44 billion in the two months a year earlier.<\/p>\n<\/blockquote>\n

The Bloomberg piece says the shrinking surplus suggests that RMB appreciation isn’t likely to happen any time soon. But appreciation is clearly in the offing. China central bank governor Zhou Xiaochuan noted<\/a>:<\/p>\n

\n

We don’t rule out that during some special periods–such as the Asian Financial crisis and the global financial crisis this time–we adopted special policies, including a special exchange rate mechanism…<\/p>\n

Sooner or later, we will exit the policies…<\/p>\n<\/blockquote>\n

And Bloomberg points out that Chinese currency futures rose on his comments. As always, the point is not that there is no effect of the RMB-dollar peg worth noting. It’s that the peg is just a small part of the imbalance question (again, look at America’s massive petroleum deficit), that the Chinese peg was part of an aggressive Chinese stimulus programme that America could easily have followed on its own, and that the intense focus on the peg as a protectionist policy is likely to be unhelpful to recovery or to liberalisation (or to RMB appreciation, given China’s domestic politics).<\/p>\n","protected":false},"excerpt":{"rendered":"

Back in February, the Census Bureau reported that America’s trade deficit continued to grow with recovery. I pointed out at the time that this wasn’t due to an increasing American deficit with China. American exports to China have actually been quite strong. Opinionators banging the drum for renminbi appreciation against the dollar, and calling the […]<\/p>\n","protected":false},"author":4534,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-405886","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/405886","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/4534"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=405886"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/405886\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=405886"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=405886"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=405886"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}