"China's dollar dilemma," by Andrew Balls and Richard McGregor, Financial Times
"China's dollar dilemma," by Andrew Balls and Richard McGregor, Financial Times
China's leaders are preparing their people for an end to the policy of pegging the renminbi at Rmb8.28 to the US dollar, the bedrock of economic policy for a decade. Changing the currency regime would have big implications for China's economic management and, some in Beijing think, forits development strategy predicated on foreign direct investment inflows and export-led growth. China's exchange rate is also central to the growing debate over whether the current imbalances in the global economy - whereby the US has a large current account deficit while other countries accumulate dollar assets - can be sustained (see chart below). Pressure on China to alter its exchange rate is particularly strong from Washington...
