China's Foreign Ministry on Wednesday said the yuan's exchange rate was not the reason for unbalanced trade ties with the United States.
In a Tuesday speech on his trade policy stances, Trump said that if elected, he would direct his treasury secretary to label China a currency manipulator, a move he said "should have been done years ago".
"China-U.S. trade cooperation is the ballast and propeller of bilateral relations. Its essence is mutual benefit. The yuan exchange rate is not the reason for unbalanced China-U.S. trade," Foreign Ministry spokesman Hong Lei said in a statement on the Ministry's website responding to Trump's comments.
"We hope some individuals on the U.S. side can objectively view China-U.S. trade relations, do more to benefit mutual trust and cooperation, and jointly safeguard the healthy and stable development of China-U.S. trade relations," Hong said.
RW note: Even if China was a currency manipulator, it does not make sense for the U.S. to do anything but adopt a path of unilateral open trade. SEE: Why Unilateral Liberalization Makes Sense
China is a currency manipulator and the US isn't? If that's not the pot calling the kettle black.
ReplyDeleteI'm tired of people who claim the trade deficit is caused by unfairness. We have the world's reserve currency. That means most countries have to hold dollars to facilitate their trade and to hold value. By definition, if they want to have dollars they need to sell us more goods in dollar value than they buy from us.
ReplyDeleteIf we run a capital account surplus we need to run a current account deficit. Chinese labor could cost twice what ours cost, if China wants to accumulate dollars they need to sell us more and buy less.
I'll bet we have a current account deficit with Germany although their labor costs are very high.
All the BRICS moving into international commerce caused a huge spike in the demand to have dollars. How many dollars did Communist China hold? The former USSR? India, Brazil, etc.? They all have hundreds of millions now.
Lucky for us that we have the paper they need to conduct trade on a large scale. Unlucky for a few export industries that can be hit bad.
Second to the insane belief that labor saving devices (robots) will put everyone out of work. If households had no washing machines or dishwashers most women with youngish children could not work outside of the home at all. Think of all the good jobs freed up for men and older/unmarried women. Only you are gaining jobs by lowering productivity. More people working and no more production.
Kettle meet pot
ReplyDelete