China Tells

During President Obama’s visit to China in this week, currency is bound to be a central topic. It is not only about RMB, but also about USD. Just hours before Obama landed in Shanghai, the chairman of China Banking Regulation Commission Mr. Liu Mingkang already spoke to public and criticizing America’s weak dollar policy in flooding the world with speculative capitals (See Article from WSJ). I believe such a gesture is a warm up for the talk between China and US on currency. The exchange rate of RMB has recently attracted media spot lights particularly in the west (See Article from Chinatells). Apparently Obama is going to raise this issue to President Hu Jingtao during the Beijing meeting. Instead of waiting US to attack on RMB, China government is well prepared and could counter the attack by raising the issue of the value of USD. After all, if US government continues to let USD slide, there is no point for RMB to budge unilaterally. I forsee that a compromise shall be reached between Beijing and Washington on the value preservation of USD and progressive appreciation of RMB.

奥巴马此次访华的一个重要议题就是人民币汇率问题。对此中国政府有充分准备。一个有力的反击武器就是美元的币值。如果美国政府放任美元贬值，同时吹起股市和大宗商品的泡沫，那么中国政府为什么要在人民币问题上妥协呢?一个可能的结果是中美就美元币值和人民币汇率达成妥协，美国政府对美元币值的下滑设个底线，而中国政府也继续让人民币稳步升值。