I have just caught up with an article on the currency conflict between the US and China. It actually appeared in the Beijing Review early in November just before the G20 Summit in Seoul on November 11th. It lays out the battle from the Chinese point-of-view (which apparently the G20 acceded to).
The currency question is not the basic one since the question of trade is the real issue. Therefore, the RMB relationships to major currencies are not the determining factor. It actually gives four diagrams of the Yuan’s central parity to the currencies of the US dollar, the EU Euro, the Japanese Yen, and the British pound, which visually indicate that only the US dollar has dropped in parity whereas the other three major currencies have all gained from June 21 through October 26. It also makes a comparison of the trade surplus of China and the history of trade surplus of the USA. We are most impressed with the third alternative calling for international negotiations at which “the Chinese government could agree to increase the flexibility of the exchange rate regime but maintain control over the pace of the Yuan appreciation” (again, diplomacy as distinct from economic warfare). It is unfortunate that the economic war being pressed by the USA obfuscates the real facts of currency relations. We hope this article will fill that gap for us.
Sidney J. Gluck