Comments (22)

As I have stated before in this space, we need to boycott Chinese goods. For reasons of human rights violations, trade practices and for the best reason, shoddy goods. Did you ever try to use a ratchet drive made in China? They fall apart. The only good thing that has come from China relying on the US as its largest trading partner is that China is reluctant to join Russia in its opposition to US policy in eastern Europe

When all smokes are settle down, this mega-ponzy schem of our government will make Maddoff look like a petty thief. The Chinese and our smarter Fed are in the same boat, except that our Fed has a life jacket (by printing more $). The Chinese can't jump off our T-bills boat because they would loose their shirts and underware. By printing more freshly $ bill, our smartly Fed makes the Chinese T-bill holding worthless. The Chinese have no choice but keep buying our worthless T-bill. In the mean time, the ollateral damages are small invester like me and yourself. Oh well, we are just a sacrified lamb in a mega-pozy schem, and the Chinese are the sucker.

I strongly believe that Mr. Taplin is right on with his incisive illustration of the folly the new Obama Administration is creating with Mr. Geithner's "manipulation" statement. Within and outside the Beltway, we get caught in the echo chamber's cacophony of voices. With Mr. Taplin, you can hear a new voice coming from the wilderness. Bravo.

I do hope the Post will bring this rising young journalism talent to the printed page with more regularity.

This seems like a complete non-article. Honestly, why was it even written? It has one of the dumbest premises that I've ever seen.

This is all very amusing, but even if entirely accurate, this all misses the real point that consumers gain from lower Chinese prices. It is only the U.S. companies (and their usually overpaid union workers) who stand to lose. They are the ones who pay the big campaign contributions to get the federal government to shield them from economic reality, including huge bailouts when necessary.

Everyone else gets soaked in the process.

Your economic analysis is completely off base....the reasons you offer, such as commodities will get cheaper because China imports their intermediate goods to assemble into final goods which are then sold in the west...or that they will buy cheaper gas in the world market, will pale in comparison to the 20% or so cut they will have to take in their foreign currency holding. At least you have honesty to cover the gaps in your argument with a statement "Thus the overall impact of a revaluation on the Sino-EU trade balance is somewhat hard to judge."

The main reason I suspect is what you state in the end...EU would rather not piss Chinese off and wait for US to take pot shots at them.

If China wants to trade as intensively as it does with the west then it must fully conform to the standards of the WTO.
As was mentioned earlier, it would make good sense for the Chinese to do what they're doing for if their currency were to be opened up then surely western financial institutions would dominate it. Which would at least initially do harm to China's export trade. Smashing a sizeable portion of their most vital lifeline in addressing their still underdeveloped social and economic country ie. healthcare and education.
So if I were the Chinese I would do all I could to keep our ridiculous, sheisty, "bad assets" at bay for as long as I could.
Please give us reform on Monday Timothy; financial regulation overhaul. Maybe then we can trade as friends instead of rivals.

Can Americans really blame the Chinese and the Europeans for doing what is in their best interests, when that's what Americans have been doing all along? America imports from China simply because it's much cheaper, not because Americans like the Chinese or want to help them, especially when China is still a communist nation. If America is still uneasy about trading with China, then it should simply stop trading with China - not be wishy-washy as usual.

I think it all comes down to what you want versus you you get, instead what's right versus what's wrong. There are always conflict interests on the two sides. China has the right to do whatever that's best for China, U.S. has the same right to do whatever that's best for U.S. The problem at here is many people in U.S. believe they should get paid much more when some poor guys in China can do the same job for much less. In this case, U.S. did not act not because they are being out maneuvered by China, but because it doesn’t make sense to make other people to pay for people who are not able to compete. It’s against basic market economy principle and doing so will only hurt U.S. even more.

“….it may also indicate that China's export competitiveness runs deeper than simply an undervalued currency.”
Yes, it could also mean a more very efficient worker at McDonald wages. If so, then no matter what we do the formula efficiency/low wages will remain firmly.

1. If it is right for China to manipulate currency for strategic domestic objectives, instead of letting free markets set the value, then the U.S. should have the right to respond to neutralize the strategy.

2. If it is right for the free markets to set their currency rates, without their government doing it, then the U.S. should not respond.

3. It is not right to say the Chinese government can strategically manipulate currency, but the U.S. cannot strategically respond.

4. If I have a choice between a good job and cheap Wal-Mart goods, my choice is clearly a good job.

Every country has the right to control its currency because it is the economic foundation of that country. If that foundation crashes, its economy will be in ruin and subject to be taken over by hostile foreign financial organizations which are just another instruments of hostile foreign countries. China has been considered the enemy of the West and the world economy is controlled by the Western countries and their financial institutions as manifested in recent world economic recession. So forcing China to letting its currency float as in a free market means letting the Western countries and their financial institutions to control China's economy to their own advantage. That is obviously not acceptabble to the Chinese. As in the past, the attempt of the hostile Western countires to subjugate China militarily and politically had failed, the present attempt to subjugte China economically will certainly fail.

To all of you that think that the US has no right to comment on the way China does business, you need to be reminded that China does alot of business with the US. We, therefore, have a vested interest in how our trading partners are conducting themselves.

Second, why won't China allow their currency to float like all of the other major world currencies? If, as the article hints as a possibility is true, that a floating currency reduces China's cost of production, then China could gain a competitive advantage and can sell even more goods, thus relieving some of the current downward pressure on its economy. On the other hand, by pegging its currency, China may also be holding down the price of its goods on foreign markets, thus undermining its international competition. This is an inherently protectionist act.

If we were to take a similar protectionist measures against Chinese access to American markets, I'm sure that the Chinese would squawk about us.

Um, Geithner's aptitide looks shaky, isn't it?

It is true that an appreciating Yuan would not proportionately increase the price of Chinas export goods. But actually lower them? No way.
Also, in what way could Europe profit in a way that the US can't?

A) What does complaining achieve? Even if CHina openly engages in every conceivable way of getting an economical upper hand, it still all come to down to what can you do about it? China have its own policies, you can't expect they change it just to please a far less than friendly country.

B) The article pointed out a very important point: if you take a look at a graph, the China's trade surplus growth was largest between 2005 and 2008, immediately after China allowed the Yuan to float, and eventually strengthened 20% against the dollar. Its like a kid crying cheater after losing a match, they just refuse to accept its their own lack of competitiveness that's the cause of failure.

C) There's another way of lowering trade deficit beside hoping they will modify their currency: sell them things you have. The problem is, what does the US have that China can't already make for less? Caterpillar and Boeing are the few that actually makes things China needs, but the vast majority of equipments and products could be made in China for much cheaper than the US, America simply does not have enough in its inventory to trade at any level of competitive price, and that's the root of the problem.

Ignorance is America's biggest enemy, when your solution to your own failing is to demand your competitor volunteer to fail as well, you will never recover.

Chinese government, as a legal entity, should have its own way of operating it's own country, which any other countries have no right to comment on. Western countries can not force China to trade with them in a completely western way. It's not fair to Chinese government and Chinese people.

You westerners are really really ridiculous. What do you really want Chinese to do? In your mind, Chinese people's movements are forever wrong whatever they do. And according to your theories, the Yuan appreciation is as bad as depreciation. So you guys please tell us---what should we do?????

I think ignored copy rights and excessive tariffs by China are a more serious problem.

Geithner's comments about the yuan seem connected to protectionist polices being instituted in the Obama administration. The free trade polices, one of the positive legacies of the Clinton administration, may be abandoned.

Protectionism is short-sighted, trying to save a few jobs, results in reduced global trade and probable higher inflation down the road. However, neither Democrats nor Republicans seem to care much that the printing of money on a massive scale and huge budget deficits are likely to lead to high inflation within a few years. They also do not seem to care about millions of Chinese who have lost and may lose their jobs as the yuan appreciates in value. Such a provincial, protectionist, narrow outlook hardly reflects well upon those who pursue such policies.

THe RMB moved 24% against the Euro in 7 months last year, perhaps that why the EU doesn't see a big issue. The real problem is we have not recovered from 8 years of Bush monetary policy. People who spend week currencies shouldn't throw rocks.

The West has long regarded China's Yuan as being undervalued. At the same time, it benefited from being able to buy cheap goods. Wal-Mart buys cheaply in China and sells cheaply in the USA. Low income American families have benefited, without any pangs of conscience, from the goods made by low-paid Chinese workers and child labour that has been used across Asia.

I cannot recall Americans boycotting Chinese goods or refusing to buy running shoes because they were made by children in Asian sweat-houses. Americans were aware of this and they did not care.

Before Geithner has amnesia, he might just recall how greedy and cold-blooded American corporations have been in the US and in foreign markets. He might also recall that he and others did nothing to bring their greedy dollar stream to an end.

It is one thing to attack China but it should be done in a context that acknowledges America's overwhelming harsh treatment of its own society and the world.

As I remember, it was not Mongolia or Kenya or Laos that brought the current crisis to the world. No, it was America and America's greed which was promoted without any sense of fairplay.