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April 13, 2005

"China's dollar dilemma," by Andrew Balls and Richard McGregor, Financial Times

"China's dollar dilemma," by Andrew Balls and Richard McGregor, Financial Times

http://news.ft.com/cms/s/d341511e-ac4e-11d9-bb67-00000e2511c8,_i_rssPage=6e6e833c-cbff-11d7-81c6-0820abe49a01.html

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...

Posted by DeLong at April 13, 2005 08:31 PM