“Something’s brewing." says Goldman chief economist Jim O’Neil about the current currency of Bejing. “I have a strong opinion that they’re close to moving the exchange rate...It could happen anytime.” Economically, there are reasons to move quickly, but politically there are reasons to stay put. Obama says it is crucial for them to "allow their currency to appreciate because, frankly, they have got a potentially overheating economy.” A change in currency policy now would be a big win for Obama – and might lead people in China and overseas to conclude that putting pressure on Beijing works. So even if a revaluation of the yuan is in China’s interest, it probably isn’t going to happen for a while.
http://images.businessweek.com/ss/07/05/0517_china_money/image/10yuan_1.jpg
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This seems like its an important thing for China's economy. It would be interesting to know what the state of the economy is in China. This also seems like it would be an important victory for Obama in China.
ReplyDeleteThis could be a great step for China since their currency is very weak compared to the rest of the world.
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