Re: the fed and the yuan

[Jonathan Lassen <jjlassen@xxxxxxxxxxxxxxxxxxx>]

Ian,

They don't believe so: "China has the right to decide its exchange rate
policy and no international agreement forbids that." from:
http://english.peopledaily.com.cn/200307/01/eng20030701_119224.shtml

But they've agreed in principle to gradually phase out capital controls in
the future (as part of the concessions they made for WTO accession), and
have signalled they are going to let the rmb float within a wider band. I'm
sure one thing the Chinese gov. is worried about is deflation. Lowered
demand for China's exports and cheaper imports would make that worse, no? I
think I might have to take a look at Brenner (Global Turbulence) again.

I just can't figure out why there's suddenly a unanimous call for
revaluation. Especially since foreign firms account for such a significant
portion of exports from China (more than half I think).

Curious,

Jonathan



At 15:46 2003-7-19, you wrote:
> ----- Original Message -----
> From: "Jonathan Lassen" <jjlassen@xxxxxxxxxxxxxxxxxxx>
>
>
>
> > Hi,
> >
> > What do people make of the nearly unanimous call for China to revalue
> the
> > yuan and/or go off the dollar peg? Industrialists, US senators and now
> Alan
> > Greenspan and EU officials have jumped on the bandwagon.
> >
> > Cheers,
> >
> > Jonathan
> ==================
>
> Didn't WTO accession give them to 2006 to end the peg?
>
> Ian