Gestural Politics of the RMB Appreciation

More

The biggest under-appreciated political story of the day might be the news that China has finally agreed to allow its currency to rise against the U.S. dollar. Granted, the details of this, which are not yet clear, are extremely important. U.S. officials, however, are already trumpeting the move as a sign that U.S. diplomatic engagement with China helped to precipitate the policy change, which has long been desired by the West, and particularly by China's debtor nations. (That China signed on to a U.N. Security Council resolution calling for Iran sanctions, leading the E.U. to adopt unilaterally tougher sanctions, is seen as the Obama administration's first major policy success. The second is China's willingness to participate in the Nuclear Security Summit.)  


Military to military relations between the U.S. and China are poor, but diplomatic relations seem to be fairly stable, if not pretty good. 

I'm no expert in Chinese economic policy, but I did ask a member of my kitchen cabinet for an assessment of what China's move really means. "China was unlikely to appreciate the currency significantly to begin with, given its dependence on exports," my guy says. "In the wake of Europe's troubles, appreciating the RMB would further weaken China's exporters. So I think the government is offering a bargaining chip when it's easy for them to point to reasons not to appreciate in a significant way."

Remember, next weekend marks the beginning of the G-20 summit, where each nation has been asked to bring something concrete that would help stabilize the world economy. This is China's offer, so to speak.

As to the appreciation decision's effect on the U.S. economy, the administration here might make a case that the move could help economic growth pick up more rapidly, but the reality is that appreciating the RMB would only help to curb inflation, which isn't much of a problem to begin with ... at least not in the short term.

Jump to comments
Presented by

Marc Ambinder is an Atlantic contributing editor. He is also a senior contributor at Defense One, a contributing editor at GQ, and a regular contributor at The Week.

Get Today's Top Stories in Your Inbox (preview)

CrossFit Versus Yoga: Choose a Side

How a workout becomes a social identity


Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register. blog comments powered by Disqus

Video

Is Technology Making Us Better Storytellers?

The minds behind House of Cards and The Moth weigh in.

Video

A Short Film That Skewers Hollywood

A studio executive concocts an animated blockbuster. Who cares about the story?

Video

In Online Dating, Everyone's a Little Bit Racist

The co-founder of OKCupid shares findings from his analysis of millions of users' data.

Video

What Is a Sandwich?

We're overthinking sandwiches, so you don't have to.

Video

Let's Talk About Not Smoking

Why does smoking maintain its allure? James Hamblin seeks the wisdom of a cool person.

Writers

Up
Down

More in Politics

Just In