Storia dell'articolo
Chiudi
Questo articolo è stato pubblicato il 07 ottobre 2010 alle ore 18:38.
WASHINGTON, DC – I share the growing concern around the world about the misalignment of currencies. Brazil’s finance minister speaks of a latent currency war, and he is not far off the mark: it is in the currency markets that different economic policies and different economic and political systems interact and clash.
The prevailing exchange-rate system is lopsided. China has essentially pegged its currency to the dollar, while most other currencies fluctuate more or less freely. China has a two-tier system in which the capital account is strictly controlled; most other currencies don’t distinguish between current and capital accounts. This makes the renminbi chronically undervalued and assures China of a persistent large trade surplus.
Most importantly, this arrangement allows the Chinese government to skim off a significant slice from the value of Chinese exports without interfering with the incentives that make people work so hard and make their labor so productive. It has the same effect as taxation, but it works much better.
This secret of China’s success gives the country the upper hand in its dealings with other countries, because the government has discretion over the use of the surplus. And it has protected China from the financial crisis, which shook the developed world to its core. For China, the crisis was an extraneous event that was experienced mainly as a temporary decline in exports.
It is no exaggeration to say that since the financial crisis, China has been in the driver’s seat of the world economy. Its currency moves have had a decisive influence on exchange rates.
Earlier this year, when the euro got into trouble, China adopted a wait-and-see policy. Its absence as a buyer contributed to the euro’s decline. When the euro fell to $1.20, China finally stepped in to preserve the euro as an international currency. Chinese buying reversed the euro’s decline.
More recently, when the United States Congress threatened legislation against Chinese currency manipulation, China allowed the renminbi to appreciate against the dollar by a couple of percentage points. Yet the rise in the euro, yen, and other currencies compensated for the fall in the dollar, preserving China’s advantage.