Why China is Right on the Renminbi
Chinese officials have been on the receiving end of a lot of gratuitous advice when it comes to the renminbi – and they have been wise to disregard it. In managing their exchange rate - including the recent decision to resume gradual appreciation against the dollar – they have gotten it exactly right.
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BERKELEY – After a period of high tension between the United States and China, culminating earlier this month in rumblings of an all-out trade war, it is now evident that a change in Chinese exchange-rate policy is coming. China is finally prepared to let the renminbi resume its slow but steady upward march. We can now expect the renminbi to begin appreciating again, very gradually, against the dollar, as it did between 2005 and 2007.