China Disingenuous about Re-Balancing Global Trade

 

http://www.reuters.com/article/ousivMolt/idUSTRE59Q0HN20091027

Just in case anyone was deluded into thinking that China was genuinely interested in restoring balance to global trade, along comes this blunt refusal by a Chinese trade official to consider anything that will slow the growth of Chinese exports:

Speaking at a separate forum in Beijing, Jiang Jianjun, a deputy director with the Ministry of Commerce’s Department of Foreign Trade, cited China’s rising share of global output and its swelling foreign exchange reserves as pressures on the yuan to strengthen.

“However, according to our projections, until there’s a noticeable improvement in exports, the exchange rate will not see a major adjustment,” Jiang said.

He said it would take two or three years for China’s combined exports and imports to regain pre-crisis levels.

Of course, exchange rates have nothing to do with trade imbalances, but that’s irrelevant.  Both the U.S. and China think that they do, and China’s refusal to allow any further strengthening of the yuan is proof positive that they have no interest whatsoever in re-balancing trade.  Give China credit.  They understand how to make trade work to their advantage.  It helps their cause that the people across the trade table from them are complete fools.

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2 Responses to China Disingenuous about Re-Balancing Global Trade

  1. Randy says:

    The people across the trade table from them are the neoliberalism cult. They don’t care at all about economics or the USA as a sovereign entity. I don’t why you expect Obama (look at who he hired) and the political process to change anything at all.

    The problem remains: how do you get rid of it? (and the other exporters like Japan and Germany got the disease as well…their middle class are being gutted too)

    • Pete Murphy says:

      The people sitting across the trade table have been fools for over three decades, including fools from both Republican and Democratic administrations. I had hope for Obama because he was the first in a long time to voice concern about trade deals and promise to do something about it. In that regard, with the exception of the tariff on Chinese tires, he’s been a complete bust. I’ll happily support a Republican candidate who vows to do something concrete to rebalance trade. Can you show me one?

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