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by hannibal5 4622 days ago
That would be worse for China because the value of CNY would skyrocket stopping their exports. Value of USD would plummet helping US exports.

Besides, China and foreigners are not anywhere near the biggest buyers of US debt. Fed is. Chinese and Japanese had actually five month net selling period earlier this year.
2 comments
aliston 4622 days ago
It would be a crisis so long as China remains an export-driven manufacturing-based economy. But, as China becomes wealthier, knowledge-based economy, it won't be as big a deal. With 1/6th of the world's population, I would think there would be plenty of domestic buyers.
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a8da6b0c91d 4622 days ago
It's rather tricky to predict how a Chinese decision to appreciate the rmb would play out in practice. Many export powerhouses have had very strong currencies for long periods. It's not as simple as saying US exports would go up and the Chinese economy would suffer. You have to consider that the Chinese have savings and would find themselves far richer in global commodities. You also have to consider the US economy's heavy dependence on freakishly low interest rates.
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