Do we really want yuan revaluation? William J. Polley: May 2005 Archives
リンク: William J. Polley: May 2005 Archives.
Do we really want yuan revaluation?
But the negative effects of a change in Chinese currency policy will probably be immediate, while the positive effects may take years to materialize. And as far as I can tell, nobody in a position of power is thinking about how we'll deal with the consequences if China actually gives in to U.S. demands, and lets the yuan rise.
I've been saying that China will not revalue until it is the right thing for them to do for their domestic economy. I've never considered the yuan issue a critical policy matter for us (in the sense that a floating yuan would make life a lot better for us). Of course, anything that arouses so much passion in Congress is bound to get my (and your) attention. Everytime I ponder the yuan, I usually end up thinking about the fact that this is a much more important issue for the Chinese than it is for us and that we can't do much about it anyway. Inasmuch as we are one of China's major customers, they probably will not ignore any negative effects that it may have on us. Still, I'm inclined to agree with Krugman on this one. All of the blustering the U.S. has been doing has been puzzling me. Until recently it has just been a buzz in the background, but it's getting louder. Loud enough, in fact, that Greenspan is stepping into the ring. Greenspan says that revaluation will not matter that much for our trade deficit.
Yet Secretary Snow just appointed a special envoy to address the Chinese currency issue. And then you have this story that is just plain disturbing:
Snow said the dark mood on Capitol Hill represented "a dangerous situation" and he hoped China recognized and understood that was the case.
If you could see me now, you'd see that I'm just sitting here shaking my head.
UPDATE: The New York Times editorial page weighs in with similar sentiments.
Posted by William Polley at 02:02 PM | Comments (0) | TrackBack
