Re: the fed and the yuan

[Eubulides <paraconsistent@xxxxxxxxxxx>]

----- Original Message -----
From: "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

=========================

Perhaps some clues here:

http://www.bof.fi/bofit/seminar/bon1701.pdf