Saturday 15 January 2011

THE US AND CHINA’S ECONOMY

The Diplomat

CHINA’S ECONOMY: ACTION VS RHETORIC

Currency revaluation, trade surpluses and globalization—there’s plenty to talk about during Hu’s upcoming trip to the US.

Yukon Huang

The Diplomat, January 15, 2011

International concern remains high that China hasn’t done enough to rebalance its economy and help reduce global trade and currency imbalances. While Beijing continues to send reassuring messages about making its currency more flexible and relying less on exports, the reality over the past year suggests there are some less comforting nuances.

With Chinese President Hu Jintao preparing to head to Washington next week, there are four issues that are worth revisiting to better understand the situation.

The first is what has been the headline-grabbing issue of currency revaluation. China claims that it’s moving to a more flexible system and gradually appreciating the currency. Flexibility is clearly desired, but a major appreciation isn’t. Beijing tends to adjust its currency in light of international political considerations, and significant upward movement has been seen shortly before three high-profile events—Premier Wen Jiabao’s meetings with Barack Obama and European leaders in the early autumn, the G-20 meeting in November, and now Hu’s upcoming US visit—since the renminbi (yuan) was allowed to fluctuate in June 2010 following the collapse of the euro.

(...) [artículo aquí]

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