China’s Fair-Weather American Friends
The US accepted the undervaluation of the renminbi as long as China returned the dollars that it earned from bilateral trade by financing America’s budget deficit. Now that the Chinese prefer to invest that money in raw materials in Africa and elsewhere, they have aroused the full ire of American policymakers.
https://prosyn.org/Gq24rjW
MUNICH – Because China has pegged its undervalued currency, the renminbi, to the dollar, every weakening of the dollar in the wake of America’s financial crisis has also meant a weakening of the renminbi vis-à-vis other world currencies. But is China really to blame for the eruption of a global currency war?