SAMUELSON: The real China threat

The policies are increasingly on a collision course. China’s undervalued currency and massive trade surpluses have produced $1.8 trillion in foreign exchange reserves (China in effect stockpiles the currencies it earns in trade). Along with its artificial export advantage, China has the cash to buy big stakes in American and other foreign firms. Predictably, that’s stirred a political backlash in the United States and elsewhere. The rigid renminbi has contributed to the euro’s rise against the dollar, threatening Europe with recession.

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