A smarter approach to the yuan

The best law schools and public policy graduate schools inculcate in their students an ability to make the strongest possible case in favor of a position or policy with which they disagree. The test of whether the lesson has been truly learned is whether those who favor the position would accept its...

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Bibliographic Details
Published in:Policy review (Washington, D.C.) D.C.), 2011-04 (166), p.29
Main Author: Wolf, Charles, Jr
Format: Article
Language:English
Subjects:
American dollar
Analysis
China (People's Republic)
Company business management
Cost control
Currency in circulation
Currency transactions
Demography
Developed Nations
Developing countries
Economic aspects
Economic conditions
Exports
Families & family life
Foreign exchange
Foreign exchange markets
Foreign exchange rates
Geithner, Timothy Franz
Graduate Schools
Hu, Jintao
Industrialized nations
Interest rates
International trade
LDCs
Legislative Bodies
Management
Monetary policy
Money
Obama, Barack
Peoples Republic of China
Political aspects
Presidents
Public Policy
Public Schools
Purchasing power parity
Renminbi
Renminbi (China)
Representation
Reserve requirements
Students
Trade deficit
Trade surplus
Trends
United States Congress
Yuan (China)
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Summary:The best law schools and public policy graduate schools inculcate in their students an ability to make the strongest possible case in favor of a position or policy with which they disagree. The test of whether the lesson has been truly learned is whether those who favor the position would accept its rendition as a fair and effective representation of why they favor it. With this in mind, I present below the argument for the U.S. stance favoring a substantial rise in the undervalued Chinese yuan. The U.S. position has been repeatedly stated, albeit in abbreviated and nuanced form, by President Obama and Treasury Secretary Geithner. It is also reflected in the large bipartisan majority in the House of Representatives that approved legislation to allow a retaliatory tariff on China's exports to the U.S. unless China revalues its currency. It has been expressed more vociferously and combatively by key leaders in the Senate, and by politically-charged commentators including Paul Krugman. Once the case for this "pro" position has been presented fairly and fully, I will explain why I think it is fundamentally wrong. I will then go on to suggest measures that would be more appropriate and effective in contributing to a "rebalancing" of China's international accounts as well as those of the U.S. than would a revaluation of the Chinese yuan. In early January, when President Hu Jintao met in Washington, D. C, with President Obama, the agenda for the meeting deftly acknowledged the presidents' disagreement on the currency issue without discussing, let alone resolving, it. Adapted from the source document.
ISSN:0146-5945
2169-6802