This makes absolutely no sense. Why does china need to keep it's currency low when America is raising interest rates? The justification in the past is that weak yuan helps with export. But reality is that Chinese exports are already dirt cheap. Any export weakness is due to global demand and protectionism rather than lack of competitiveness.
Relying on the same old trick of keeping currency down to encourage export really doesn't apply here.
On the other hand, a stronger usd simply allows deep state to continue fund it's anti china agenda.
People all day want rmb to be internationalized and for usd to weaken. But then we get to this scenario and excuses are being made again.
Go back to beginning of this year on this thread and see how many people were excited about rmb appreciating.
Either you want a stable and strong rmb that other countries are willing to invest in or you don't.
It isn't about exports only, it's also about domestic pricing. Also other countries will take RMB anyways, because they have no choice if China says they need to, regardless of the RMB value.
So far the only actual argument I see here is that suppressing currency value could make companies have worse profit margins and stop R&D, but we are simply not seeing that are we? That's firmly within hypotheticals.
You understand my point then, if China followed similar interest rates and monetary policy as the US, we would have a global liquidity crisis (and probably global financial crisis too), unlike now. China's relatively weak RMB is what's keeping all those developing countries with a small foreign reserve and lack of USD swap lines alive. That's why you hear all these stories now about xxx country starting to use RMB, because they can't afford to borrow and pay in USD right now.
This.
Some people keep saying that US continuing to force appreciation is somehow going to help them against China. Appreciation without productive development just leads to guaranteed stagnation. There is a reason US is struggling to slow down even Russia economically, despite supposedly having a much larger economy. It's inflated to hell with useless appreciation, which Americans can't use to do anything with.
At this rate, NATO is headed towards 1990s Japan territory. US is struggling to build really basic manufacturing because it has become way too expensive. And once a whole generation of workforce becomes tainted by not having any growth projects, then you will not just have issues with expenses but with industrial quality as well. Then, those negative changes become irreversible.
