As today’s Progressive Breakfast points out, NYT news reports suggests move is for real, part of fundamental change in Chinese economy:
“For years, Chinese leaders looked to the millions of poor workers from the country’s interior as the engine of a roaring export economy … These days, the workers … must start buying the very products they manufacture … China’s move this week to make its currency, the renminbi, more flexible and the authorities’ apparent tolerance of recent factory strikes that have led to significant wage increases both signal that Chinese leaders could be serious about re-engineering the nation’s economic model.”
But Naked Capitalism calls China currency move a “headfake”:
“China allowed the renminbi to appreciate a grand total of 0.39% against the dollar this week. leading commentators to rethink China’s canny ploy. Today, the Financial Times gives a reassessment. It notes in particular that domestic interests are fiercely opposed to a rise of a mere 2-3% against the dollar, much the less the 20% to 40% that most experts deem necessary…”
and NYT’s Paul Krugman if China keeps “playing games,” we must take strong action.
“China needs to stop giving us the runaround and deliver real change. And if it refuses, it’s time to talk about trade sanctions.”
Meanwhile, what is the White House up to? Is the White House pushing Senator Schumer to keep his bill requiring the US to take action on China’;s currency off the Senate Floor? The Hiss: Schumer feels pressure on his China bill,
The White House has pressed Sen. Charles Schumer (D-N.Y.) not to offer his China currency legislation as a floor amendment, where it would almost certainly be approved, according to two sources.
. . . The administration is desperate to prevent floor action on Chinese currency legislation, since a successful vote would be a setback to U.S.-China relations.
Schumer’s measure could lead to higher tariffs on Chinese imports by allowing currency manipulation to be considered when assessing anti-subsidy duties.
Finally, the Yuan is rising a bit, China’s yuan ends at fresh high against dollar ahead of G20.
So we are all waiting to see what comes out of the G20.
