Chart Of The Day: Mr. Deng’s Drastic Yuan Devaluation And The Long Mercantilist Peg Which Followed

Bloomberg reports:

The economy was closed to non-socialist countries under Mao Zedong for 30 years and then China started liberalizing at its own pace, an approach the late leader Deng Xiaoping called “crossing the river by feeling the stones.” In 1994, it set a fixed rate for the yuan against the U.S. dollar, a peg that endured for a decade. After China joined the World Trade Organization in 2001, selected foreign institutional investors were permitted to buy yuan-denominated stocks in limited amounts. The yuan’s peg was dropped in 2005 and then unofficially slapped back on in 2008 to insulate China from the global financial crisis.

(Chart and headline from Contra Corner)