US and China to clash over yuan fall

[girl gone mad]

The yuan is now nearly 2% lower v. the dollar than it was in June when China pledged to depeg.

gee.. hoocoodanode?

US and China to clash over yuan fall
http://www.telegraph.co.uk/finance/currency/7947089/US-and-China-to-clash-over-yuan-fall.html

The yuan dropped at the fastest pace in almost two years last week and is now 1.8pc lower against a basket of currencies than in June, when Beijing announced the end to its fixed peg against the dollar.

Western economists had seen yuan liberalisation as a sign that China is abandoning its mercantilist policy in a step-by-step move towards a floating currency, which was expected to rise. They misjudged China's motives badly.

Sander Levin, chair of the House Ways and Means Committee, said the US may have to consider retaliatory sanctions. "We must ensure that the international trading system ensures fair rules of competition. There is no real question that China's deliberately undervalued exchange rate is unfair, contributes to global trade imbalances, and costs the US jobs," he said.

Many on Capitol Hill suspect that China fiddled trade data with a "one-off" deficit in March when the Obama administration was preparing its verdict on whether Beijing is a currency manipulator.

[DJ13]

1. How often does our government get screwed by China before

they stop taking their word on economic matters?

Have any US officials ever heard of the ancient Chinese text The Art Of War?

[jtuck004]

2. What do you envision US doing that wouldn't screw us worse?

Just curious...

[DJ13]

3. At this late date, thats a good question

If I could go back to the late 90's right after China was given both most favored nation status and entry into the WTO it would be easier to deal with.

At this point we only have trade as leverage on their currency manipulations, but the corporate owned US government is too afraid of angering the business community to make even that viable.

[jtuck004]

4. That might not be a bad idea today, if you could sell people on why

they can no longer afford to go to Wally cause everything went up ;)

Prices would increase, the gov could fund an entrepreneur program and drop payroll taxes for a couple years to give them some cash to increase demand for stuff. Then if existing business people thought it was beneath their profit requirement I bet some of the 30 million unemployed or underemployed people would take jobs in an employee-owned shop. And if Applied MAterials didn't want to open their next factory here, perhaps we could fund a gov-sponsored capital investment plan, and some more of that 30 million could own and run that.

Would take the economy down for a while, but it sure seems like it's going to depress anyway. At least we would have a future to look forward to.


thanks!