Managing The Dragon

Last week’s G-20 meeting in Seoul, South Korea was intended to be the venue where President Barack Obama would turn up the heat on China to revalue its currency against the dollar. That’s not exactly what happened. In advance of the meeting, the Federal Reserve announced that it would buy $600 billion of Treasuries to [...]

Those of us involved with China on a daily basis have been living with currency issues for a long time. Ever since China began racking up large trade surpluses with the United States, politicians and special interest groups in the United States have been charging that China keeps the renminbi undervalued in order to make [...]

On June 19, the Peoples Bank of China released the yuan’s peg to the U.S. dollar, and announced that it would instead peg the yuan to a basket of currencies. China regards the composition of the currency basket as a state secret, and officials haven’t publicly disclosed what currencies are being used in the basket. [...]

After dropping precipitously from over $1.50 at the beginning of 2010 to a four-year low of $1.19 on June 7, the Euro has been recovering ever since. On Friday, the Euro closed at $1.26, up sharply in the week’s last three days of trading. Not wanting to suffer the same plight as Greece, Germany, the [...]

The Euro is under attack. As a result of problems in Greece, the massive relief package assembled by the European Economic Union to bail out the country, and economic storm clouds hanging over Portugal, Spain and others, the Euro is tumbling in value against the U.S. dollar. The Euro has declined 14.7 percent from the [...]

In order to describe China’s different and lower cost perspective, I tell audiences that when Americans come to China and see a 100 RMB bill, they automatically divide by 8, the approximate exchange rate between the U.S. dollar and the RMB for most of the time that I have been here, and really see the [...]

U.S. Treasury Secretary Timothy F. Geithner made a brief stop in Beijing on Thursday, meeting for 45 minutes with China Vice Premier Wang Qishan in a private room at Beijing Capital Airport. Although details of the discussion have not been released, the obvious purpose of the meeting was to discuss face to face whatever agreement [...]

Zhou Xiaochuan, governor of the People’s Bank of China, used an appearance at the National People’s Congress to give the clearest indication in months that Beijing is preparing to abandon the peg to the US dollar that it informally introduced in mid-2008. He told a press conference that the currency peg was a “special measure” [...]

Yesterday morning, news reports were filled with headlines that President Barack Obama had “vowed to get tough” with China on its currency. By the end of the day, the headlines told how China was “hitting back” over Obama’s criticism of its currency policy. And so it goes. A currency dispute between the two superpowers now [...]

The global economy is much more stable today than it was at this time last year, but that doesn’t make 2010 any easier to predict. In January 2009, the debate was all about numbers. Would China’s economy grow by 8 percent as the government was predicting, 7.2 percent as the World Bank concluded, or considerably [...]