The Change Mariner

China Rethinks The Peg Tying Yuan and Dollar

WSJ.com (registration required):

Pressures building within China's hard-charging economy are driving Beijing to re-examine the Chinese currency's iron-like tether to the U.S. dollar, with a loosening looking more and more like a matter of when, not if. The U.S., the European Union and other trading partners have urged China to let the yuan float, contending that the currency is undervalued and fueling a predatory export boom.

But it is internal economic concerns -- not outside political pressures -- that are occupying Chinese leaders' minds. The financial system is awash with money. The amount of cash and private deposits surged 20% last year, twice the rate of the torrid economy. With so much money around, banks are lending at a similarly brisk pace. Inflation, dormant for most of last year, has picked up, and in December it rose 6% over the previous month.

Posted by Bob King at February 16, 2004 12:41 PM | TrackBack
Related Categories: Country - China | Quadrant - Economic | Quadrant - Political

Capitalist China : Strategies for a Revolutionized Economy
John Wiley & Sons

Amazon Price: $31.45

China and the Global Economy: National Champions, Industrial Policy, and the Big Business Revolution
Palgrave Macmillan

Amazon Price: $43.46

Integrating China into the Global Economy
The Brookings Institution

Amazon Price: $19.95