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美國.洛杉磯

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為什麼美國要強制中國降低匯率

CHINA WATCH - WHY THE U.S. SHOULD GET OFF ITS HIGH CURRENCY HORSE

TOM PLATE

China often gets bad press in America, and sometimes it is deserved. But not always. Take the controversial case of Chinese currency manipulation.

We know for a fact that it is a fact.  None other than Ben Bernanke confirmed it in his public testimony. He told us that China’s suppression of the value of its currency is indeed a real factor tripping up the sputtering American economy.

We have heard this indictment of Chinese“currency

manipulation” many times before, but often from sources not worthy of trust, or so determined to demonize China as to be easily dismissed. But when Bernanke says it, I have to believe it.  And probably you should, too.

Our chairman of the U.S. Federal Reserve System, bravely leaving leafy Princeton University in 2002 for Washington duty, is no academic drama queen or chintzy Washington demagogue. He is a public servant whose stature, had fate permitted him to head the Fed in more fortunate economic times, would transcend that of his predecessor, Alan Greenspan, who believed all too religiously in the inherent goodness of unregulated markets. 

In publicly responding to the China currency question, Bernanke did not toy or hide behind ambiguity, as his predecessor sometimes did. He tried to tell it as it is, but carefully. What he pointedly did not state the other day was that the undervalued Chinese currency is “the” reason for our troubles or even a “major” reason.  What he suggested, instead, was that the Chinese under-valuation is a factor that is worth worrying about, and perhaps discussing, perhaps like adults; and maybe it would be in China’s own interest to ameliorate the problem rather soon.

Here are the measured words, spoken before the Joint Economic Committee of the U.S. Congress: "I do think that China's currency policy, besides creating problems for them – in particular … inflation … which is a result to a large extent of their currency policy – has been to some extent preventing global adjustment…. A more balanced growth path could be achieved if there was greater flexibility in currencies. China's currency policy not only affects obviously U.S.-China relations, but it also affects third party currency policies as well."

The context of his testimony was congressional committee consideration of a new law designed to penalize Chinese exports via higher taxes so that when they hit U.S. store shelves they are more expensive to buy. This presumably would reduce Chinese sales here. The wide gap in China-U.S. trade (much favoring China) is due to such sales, which are said to be largely the product of abnormally low Chinese retail prices, which are the calculated inspiration of the Chinese dollar kept artificially down-market in its effective international exchange rate.

About which, three points must be made:

One: The Chinese government’s policy of currency low-price control is not designed to undermine the American economy. Its goal is to keep unemployment down in a vast country of 1.3 billion (if not more), by making sure as many people as possible working like little squirrels, churning out products that the richer people (like Westerners) want to pocket. The Chinese believe higher prices on their goods will result in fewer sales and will create vast unemployment in their backyard. More jobless, they fear, will trigger mass instability.

Two: The Chinese will dramatically change that policy when – and only when – they have concluded that it is in their national economic and political interest. They will not do so because of lectures that it is the morally or ethically correct thing to do as a “responsible member of the international community,” or somesuch….

Three: Being subjected to lectures by American politicians makes it easier for them to say to others in their region and elsewhere: See, this is what we are up against! This is because the Chinese – like all governments in Asia, and many governments in the rest of the world – are still smarting from the grossly morally reprehensible behavior of Wall Street and its allied banks during the last decade of economic meltdown. Nobel Prize winning economist Joseph E. Stiglitz agrees: “Regrettably, many of the worst elements of the U.S. financial system - toxic mortgages and the practices that led to them - were exported to the rest of the world.”  Believe me when I say this: If we expect Asia in particular to harbor short memories of serious Wall Street malfeasance, exported to them with no reluctance of conscience, an unpleasant surprise may be coming.

Even governments otherwise loyally allied with us regard U.S. economic lecturing these days as hypocrisy or at least memory impairment at its worst. Rather than approach the Chinese by trying to choke them with the high moral line, we’d be better served approaching the issue with humility or even a touch of slightly sincere contrition. We perhaps might also remember that they have in their bank more than a trillion bucks in U.S. Treasury bonds that in theory they could unload at the drop of an angry hat.

In the big wide world of manipulation and deception, we are as guilty as they come. We will win no friends – or more rapidly lowered Chinese currency – by tramping around as if we are without significant sin.

At the same time, it may be hoped that internal economic developments inside China will speak for themselves – perhaps even loudly enough for Beijing to act appropriately. For if the honorable Fed chairman is right, the Chinese are probably hurting themselves as much as anyone.

 

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