China’s record $1.1 trillion trade surplus masks a demand weakness that a stronger yuan could address
What would work best is a macro-level fix. China’s current account surplus, at 2% of GDP, is only about half the size of its trade surplus, thanks to a services deficit. But it also means it’s exporting capital to that extent. Some of it has long been going into foreign sovereign bonds, its stash of which was enlarged by a cheap-yuan policy and could plausibly be weaponized (against, say, the US).
Post Comment