A call to expand offshore market of renminbi

Arvind Subramanian, 11 February 2010What is the consequence of China’s exchange rate policy? This column argues that focusing on global imbalances clouds the real costs, and that China’s exchange rate regime is a mercantilist trade policy whose costs are mainly borne by other developing and emerging market countries.Full Article: Who pays for the weak renminbi?

A new book on China (and Asia) in the global economy, the costs of the Chinese currency regime, the prospects for a Chinese hard landing, and can China save the day if the US and euro area go into recession.

Brian Rezny submits: After long pressing China to allow their currency to strengthen (because a weak currency gives them an “unfair” trade advantage), the Obama administrations’ wish has been granted…sort of. Speaking Sunday after the G20 summit, President Obama said, “…the renminbi is going to go up and it’s going to go up significantly”. We’ll see. The renminbi (yuan) has been pegged at 6.83 to the dollar since July 2008.

Avinash Persaud, 16 February 2011Criticism of China’s exchange-rate policy continues throughout the US. This column argues that the US is in fact the exchange rate manipulator, due to its ongoing quantitative easing. What the US needs to do for a sustainable turnaround is to learn from other successful economies like China and Germany – not de-rail them.Full Article: The fog of currency war

Mohamed Ariff, 19 February 2010China’s exchange rate policy has implications for global trade and particularly other East Asian nations. This column argues that, given China’s fixation on the dollar peg, countries such as Thailand and Malaysia may have no choice but to peg their currencies to China’s yuan. Full Article: The China syndrome on exchange rates

Maybe. Governor Romney has stated that he will declare China a currency manipulator on Day One, should he be elected President. In contrast to his other policy positions – from tax rates on the upper incomes, defense spending, coverage of pre-existing health conditions, the Blunt Amendment, Afghanistan timetable, first strike on Iran – he has exhibited remarkable (and pretty unique) constancy in his desire to call China a currency manipulator.

Once again we are seeing articles and research papers stating the Chinese renmimbi (yuan) is about to replace the dollar as the global reserve currency. Here is a working paper by Arvind Subramanian and Martin Kessler at the Peterson Institute of International Economics stating The Renminbi Bloc is Here: Asia Down, Rest of the World to Go?.