More Countries Adopt China’s Tactics on Currency

A proposal in the US Congress would impose tariffs on nations that keep their currencies artificially low. “But many around the world fear getting trampled as the United States and the Chinese battle each other,” explains this article in the New York Times. Japan, Brazil and other nations follow China’s lead, taking measures to devalue their currencies and boost exports as internal demand subsides and unemployment bedevils the developed world. With tariffs or devaluation, nations seek to reduce trade deficits with China. To its credit, China has let the renminbi inch upwards to its real value, but a thriving domestic market has not materialized. If exports fall, the Chinese government fears global pressure will slow its economic growth, triggering unemployment and unrest; Chinese workers expect appreciation from American consumers for “bargains” they offer. French President Nicolas Sarkozy proposes global coordination to prevent a free-market slide into protectionism and economic chaos. – YaleGlobal