China Trade Time Bomb

Robert J. Samuelson says:

By accident or design, China has embraced export-led economic growth. The centerpiece is a wildly undervalued exchange rate. Economist Morris Goldstein of the Peterson Institute thinks the yuan is 40 percent cheaper than it should be. The resulting competitive advantage props up exports, production and jobs. Since 2001, China's surplus on its current account -- the broadest measure of its trade flows -- has jumped from $17 billion to $239 billion. As a share of China's GDP, it has zoomed from 1.3 to 9.1 percent. These figures include Chinese firms and multinational companies doing business in China.

To read more:

http://www.washingtonpost.com/wp-dyn/content/article/2007/05/08/AR2007050801580.html?referrer=email