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.
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