Thank you for your informed comment! This is the type of stuff that is missing from my political econ class... which, because you mentioned it a few times in your comment, is a very slanted teaching of the subject. Very Friedman and very neoliberal, to say the least. Anyway, I hope you don't mind me asking you a few questions about the "China currency" issue.
I completely understand why U.S. politicians dislike the fact that China's currency makes it so competitive in export markets, but is there anywhere in the WTO that says a national currency cannot be pegged under what it's supposed international value is (I am legitimately asking, I don't have such in depth knowledge of the WTO charter)? Even more, something to note about the rhetoric of Congressmen and women when discussing China's "undervalued currency". The whole argument and sentiment, to me at least, seems recycled from Japan's heyday- when the prospect of Japan overtaking the United States as the largest economy in the world didn't seem impossible- under President Reagan. At that time, all news pundits, politicians, and more could talk about was how "undervalued" the Japanese Yen was. Then, the United States called a G-5 meeting in 1985 and established the Plaza Accord- a deliberate strengthening of the Japanese Yen against the U.S. Dollar. Since the Plaza Accord, the Japanese economy has taken many hard and long hits to its economy, and hasn't achieved the same vigorous growth rate that it enjoyed before strengthening their currency. My question to you is, do you think that if China appreciates its currency, much of the same would happen?
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I completely understand why U.S. politicians dislike the fact that China's currency makes it so competitive in export markets, but is there anywhere in the WTO that says a national currency cannot be pegged under what it's supposed international value is (I am legitimately asking, I don't have such in depth knowledge of the WTO charter)? Even more, something to note about the rhetoric of Congressmen and women when discussing China's "undervalued currency". The whole argument and sentiment, to me at least, seems recycled from Japan's heyday- when the prospect of Japan overtaking the United States as the largest economy in the world didn't seem impossible- under President Reagan. At that time, all news pundits, politicians, and more could talk about was how "undervalued" the Japanese Yen was. Then, the United States called a G-5 meeting in 1985 and established the Plaza Accord- a deliberate strengthening of the Japanese Yen against the U.S. Dollar. Since the Plaza Accord, the Japanese economy has taken many hard and long hits to its economy, and hasn't achieved the same vigorous growth rate that it enjoyed before strengthening their currency. My question to you is, do you think that if China appreciates its currency, much of the same would happen?