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| China-Japan-Koreas |
| Geithner eyes implementation of China yuan move |
| 2010-06-19 |
| Plaza Accord no II coming up for China? They had better have studied what happened to Japan, when it had a rush of blood to the head and allowed the Yen to appreciate against the $US. Still in recession 25 years later. This is all talk. China won't change its exchange rate unless and until forced to do so. China has its own problems, and a cheap currency helps their domestic situation substantially. Treasury Secretary Timothy Geithner said on Saturday he welcomed China's decision to make its yuan exchange rate more flexible, and called for "vigorous implementation" of the change. "We welcome China's decision to increase the flexibility of its exchange rate," Geithner said in a statement released by the U.S. Treasury Department. "Vigorous implementation would make a positive contribution to strong and balanced global growth. We look forward to continuing our work with China in the G20 and bilaterally to strengthen the recovery." China's central bank said earlier on Saturday it will gradually make the yuan's exchange rate more flexible, indicating that it was ready to break a 23-month-old dollar peg that has come under intense criticism from the United States and other countries. The People's Bank of China all but ruled out the one-off revaluation or major appreciation hoped for by critics, saying there was "no basis for big fluctuations or changes" in the exchange rate. The move comes before a Group of 20 leaders summit in Toronto next week, where U.S. President Barack Obama and others were expected to increase pressure for a yuan move. By shackling the yuan to the dollar, U.S. lawmakers and manufacturers say Beijing has gained a trade advantage that costs U.S. jobs. Geithner in recent weeks had taken a softer approach toward China on the yuan exchange rate, delaying a Treasury Department report on whether China manipulates the value of its currency. Such a finding would trigger negotiations with China involving the International Monetary Fund and could lead to punitive trade sanctions. But with Congress getting impatient and threatening trade legislation aimed at the yuan, Obama this past week ratcheted up his rhetoric on China's foreign exchange rate policies, telling his G20 colleagues in a letter that free-floating currencies were essential to global economic activity. |
| Posted by:tipper |
| #2 It's like a poker game in which both players keep increasing their bets even though they are bluffing. Both players knows the other is bluffing, but they are just not sure who has the worse hand. |
| Posted by: phil_b 2010-06-19 23:40 |
| #1 The party is only concerned about power [sound familiar?]. They'd rather eat bad American Treasury Bonds than deal with the social upheaval that proper 'free market' pressures would do to the yuan. The People's Bank of China all but ruled out the one-off revaluation or major appreciation hoped for by critics, saying there was "no basis for big fluctuations or changes" in the exchange rate. Actually, the crappy US Treasury Bonds should be the basis for the market to be allowed to adjust itself. Quit buying them. Of course, then the Americans wouldn't have the economy to buy the products that are churned out by your workers. Had you allowed this adjustment to occur naturally over the last two decades, it would have been gradual. Now when it does come, it's going to be a real crisis for everyone. |
| Posted by: Procopius2k 2010-06-19 11:51 |