Graph of the Day: Annual RMB Export Growth vs. RMB-USD Appreciation

By Edward Harrison On Oct 25, 2010

This graph comes via the Council on Foreign Relations (hat tip James Fallows).

The Chinese were implementing a gradual revaluation before the credit crisis. They stopped revaluing their currency versus the USD in 2008. And immediately two things happened.

Household spending growth plummeted
Exports surged

The question for everyone is whether this is currency manipulation and, if it is, what to do about it.

Edward Harrison 7783 posts 575 comments

Edward Harrison is a senior Editor at Bloomberg. He is also the founder of Credit Writedowns newsletter, a former career diplomat, investment banker and technology executive with over twenty five years of business experience. He speaks six languages and reads another five, skills he uses to provide a more global perspective. Edward holds an MBA in Finance from Columbia University and a BA in Economics from Dartmouth College.

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11 Comments

Attitude_Check says 14 years ago

Of course it is currency manipulation. China has very strict currency controls and the RMB isn’t fully convertible. The value of the RMB is exactly what the Chinese leadership want it to be. They achieved their objective, boosting exports and minimizing domestic household spending.

This is absolutely an example of currency war.

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