According to Article IV, Section I of the IMF's Articles of Agreement, IMF members commit to:
'Avoid manipulating exchange rates or the international monetary system in order to prevent effective balance of payments adjustment or to gain an unfair competitive advantage over other members.'
This takes effect in the WTO because the IMF is the body that is to be consulted to resolve issues of currency manipulation. Of course, this has never happened in the almost 40 years since this text was adopted, despite some pretty clear cases of currency manipulation, so yeah, it's kinda against the rules, but it's much more useful for complaints for domestic consumption that somehow countries aren't getting a fair shake.
I've never heard the Plaza Accord being blamed for Japan's decline so much as a huge asset bubble along with an aging an shrinking workforce. Both of these are very applicable to China of course. Also, anyone thinking this is the reason why manufacturing jobs went to China, and they're now moving to South East Asia, is simply wrong. Likewise those thinking that the currency is the biggest problem. China is an incredibly protectionist market. Foreign firms need to find a local partner who controls 51% of a joint venture. For this 51%, at best you will get a partner that does nothing. Worst case scenario is that they'll learn your operations and at some point, take over the entire joint venture.
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Date: 9/12/15 07:33 (UTC)'Avoid manipulating exchange rates or the international monetary system in order to prevent effective balance of payments adjustment or to gain an unfair competitive advantage over other members.'
This takes effect in the WTO because the IMF is the body that is to be consulted to resolve issues of currency manipulation. Of course, this has never happened in the almost 40 years since this text was adopted, despite some pretty clear cases of currency manipulation, so yeah, it's kinda against the rules, but it's much more useful for complaints for domestic consumption that somehow countries aren't getting a fair shake.
I've never heard the Plaza Accord being blamed for Japan's decline so much as a huge asset bubble along with an aging an shrinking workforce. Both of these are very applicable to China of course. Also, anyone thinking this is the reason why manufacturing jobs went to China, and they're now moving to South East Asia, is simply wrong. Likewise those thinking that the currency is the biggest problem. China is an incredibly protectionist market. Foreign firms need to find a local partner who controls 51% of a joint venture. For this 51%, at best you will get a partner that does nothing. Worst case scenario is that they'll learn your operations and at some point, take over the entire joint venture.