Financial Regulatory Forum

COLUMN-China move like history in slow-motion: James Saft

(James Saft is a Reuters columnist. The opinions expressed are his own)

By Jim Saft

HUNTSVILLE, Ala., June 22 (Reuters) – Asked about 175 years after the fact what he made of the French Revolution, Chinese Premier Zhou Enlai is said to have thought for a moment and concluded: “It is too soon to tell.”

Tell a U.S Congressman up for reelection or an unemployed auto parts worker in Ohio the same thing about China’s new policy to give the yuan more latitude in how it trades against the dollar and, once you’ve picked yourself up off the ground, you’ll have a different answer.

China on Saturday said it would end the yuan’s currency peg to the dollar, allowing it to trade more freely. It also made clear that no big move was forthcoming, preparing the way instead for “gradual” appreciation.

From a Zhou Enlai-like Olympian perspective this is a move in the right direction and, probably, helps to set the stage for a slow-moving but profound transformation in China’s economy and how it interacts with the rest of the world.

This is positive on many levels; it spreads the effects of Chinese growth more widely, it helps, at least a little, to rebalance global trade and, though they won’t be thankful for it, it gives U.S. consumers one more reason to not stuff itself with subsidized goods they so manifestly cannot afford.

ANALYSIS-China FX move only a minor aid to G20 rebalancing

By Brian Love

PARIS, June 21 (Reuters) – G20 leaders are likely to remain divided over how to balance the global economy at their summit in Canada this weekend, despite China’s decision to let its currency trade more freely.

Beijing’s abolition of the yuan’s 23-month-old peg against the U.S. dollar, announced on Saturday, may partially ease tensions at the meeting by clearing the way for appreciation of the Chinese currency in the long term.

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COLUMN – China’s export dominance must force US rethink: John Kemp

– John Kemp is a Reuters columnist. The views expressed are his own –

By John Kemp

LONDON, March 23 (Reuters) – Managing the rise of China’s vast economy and healing the U.S. trade deficit will require a new willingness and capacity to boost U.S. technology exports at affordable prices. More importantly it requires a new language from policymakers and a new mindset.

In a recent survey of American businesses, the proportion who felt unwelcome operating in China had risen sharply, amid tense stand offs involving Rio Tinto and Google. But with U.S. legislators in full flag-waving cry about China as a currency manipulator, is it really surprising China is looking to become more self-reliant?

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