Trump’s Victory in Stopping China’s ‘Manipulation of Yuan Rate’


SCMP says in its report “China signals change of course on long-standing yuan policy” today, “China has changed its long-standing rhetoric on its yuan policy, signalling Beijing may alter its course on exchange rates this year under pressure from US Federal Reserve rate rises and US President Donald Trump’s threats of a trade war.”

Is SCMP really ignorant of China’s plan to liberalize its currency in order to break US dollar’s financial monopoly?

EU has developed its Euro to break the monopoly but failed due to its own economic problem. China certainly also wants to do so, but it has no experience and is faced with the uncertainty whether its currency can resist international speculators’ attack. However, it is indeed too important for China to liberalize its currency in order to make its currency an international currency comparable to US dollar. Otherwise, it will suffer greatly if the US increases its money supply excessively to reduce the value of its debts in US dollars.

China will soon surpass the US in the size of its economy. Its currency certainly shall have a position in the world commensurate with its economic position.

The US is certainly aware of China’s long-term plan to liberalize its currency. So must be US President Donald Trump, but he wants an easy victory in obtaining China’s concession on currency rate so that he will have something to please US public and imbue them with confidence in him.

Comment by Chan Kai Yee on SCMP’s report, full text of which can be found at http://www.scmp.com/news/china/policies-politics/article/2076223/china-signals-change-course-long-standing-yuan-policy.

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2 Comments on “Trump’s Victory in Stopping China’s ‘Manipulation of Yuan Rate’”

  1. Simon says:

    I doubt the international community believes anything Trump says.

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  2. Steve says:

    Every nation does it, the monetary policy operation in differing wordings of currency intervention or currency manipulation or forex market intervention with the intention of influencing the exchange rate. The people bank of China don’t need US treasury dept. permission to sell it’s Yuan. Over the past decade the Yuan has already appreciated by a third and its no longer undervalued. China has the financial and economic wisdom when to liberalise it’s currency.

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