Yale economist Stephen Roach’s excellent piece on the “currency
manipulation” debate:
Roach observes:
“China remains in
the crosshairs of US politicians who believe that American workers are the
victims of its unfair trading practices.
While this argument
has great emotional and political appeal, it is deeply flawed, because the
United States has an insidious saving problem. America’s net national saving
rate – the sum total of household, business, and government saving (adjusted
for the depreciation of aging capacity) – currently stands at 2.5% of national
income. While that is better than the negative saving rates of 2008-2011, it
remains well short of the 6.3% average of the final three decades of the
twentieth century.
Lacking in saving
and wanting to grow, America must import surplus savings from abroad. And to
attract that foreign capital, it has no choice but to run equally large
balance-of-payments deficits”.
Related:
http://vivekjayakumar.blogspot.com/2015/05/chinas-currency-no-longer-undervalued.htmlUpdates:
http://www.economist.com/news/finance-and-economics/21652321-imf-changes-its-tune-chinas-currency-feeling-valued
http://www.bloombergview.com/articles/2015-05-28/stop-calling-china-a-currency-manipulator
http://www.bloombergview.com/articles/2015-05-28/stop-calling-china-a-currency-manipulator