[lbo-talk] WSJ: Congress Threatens To Take Action It Probably Can't Take

Doug Henwood dhenwood at panix.com
Fri Apr 8 12:34:58 PDT 2005


joanna bujes wrote:


>This complaint about the Yuan being undervalued seems weird to me.
>The Yuan is pegged to the dollar. If the Yuan is "undervalued" does
>this not proceed from the fact that we are printing too many
>dollars? Why is it necessarily their "fault" that the Yuan is
>"undervalued." ?

The peg is precisely the point - those who think the yuan is undervalued think the peg should be broken and the currency allowed to float higher. The peg itself is seen by China-bashers as an unseemly state intervention in natural market relationships.

The US is about the only country that China runs a significant trade surplus with. So claims about this being a systemic problem look overstated.

You've got to wonder how this is playing in Bentonville.

Doug



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