China Has Already Met Its Bashers (Original) Demand
About Mitt Romney's bashing of China for "manipulating its currency" (as if the Fed doesn't manipulate the dollar), one can note one interesting thing. Back in 2005, when New York Senator Charles Schumer (D) along with South Carolina Senator Lindsay Graham (R) first started proposing bills to slap tariffs on Chinese goods, they estimated that the yuan should be 27.5% more expensive and therefore proposed a 27.5% across the board tariff on Chinese goods .
Yet China has since 2005 increased the value of the yuan by rougly 30%, from 12.1 U.S. cents to 15.7 U.S. cents (In inverted terms, this means that the dollar has dropped from 8.28 yuan to 6.38 yuan). So according to the estimates of the China bashers themselves, China has already ended the undervaluayion of the yuan and has in fact raised the yuan slightly above fair value.
Yet China has since 2005 increased the value of the yuan by rougly 30%, from 12.1 U.S. cents to 15.7 U.S. cents (In inverted terms, this means that the dollar has dropped from 8.28 yuan to 6.38 yuan). So according to the estimates of the China bashers themselves, China has already ended the undervaluayion of the yuan and has in fact raised the yuan slightly above fair value.
posted by stefankarlsson at 8:09 PM
2 Comments:
That's it? Thats your analysis?
Since 2005 the Chinese economy has grown at what? 9% a year while the U.S. economy has grown at 2% a year? (just guessing here).
You are using politicians from 2005 to say that 6 years later the same economic ratios apply?
Your profile says you are an economist. Are there any other economic measures where we take something that was said 6 years ago regarding a very fluid metric, and apply it to today without looking at what happened over that 6 years? No there is not.
I can't believe this blog post showed up as yahoo finance story. There is no substance behind your post. Do something significant.
Because of your insolent terminology I was very close to deleting your comment, but I'll let it pass this time.
As for the reply to your more factual arguments, note that for the last few years North Dakota has grown rapidly while Nevada has seen a dramatic contraction. Does that mean that North Dakota has been manipulating its currency?
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