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I've always understood China's currency manipulation to play an initial role in making it an attractive source of commodity products.

by piker 1y ago

ImHereToVote 1y ago
Why can't a sovereign state control their fiscal policy? Who should decide what the value of the Renminbi should be if not the PBC?
- cma256 1y ago
  The same reason a sovereign state can't act unilaterally in any domain -- diplomacy. If your actions affect another (or even just inspire interest) then the other party may make decisions which affect your country.
- _heimdall 1y ago
  Currency debasement is more monetary policy than fiscal policy I think. Either way I didn't read the GP comment as saying China can't do that, just that doing so is what gave them an edge long enough to gobble up a lot of our trade.
hearsathought 1y ago
China was an attractive source for the same reason vietnam and india are today. Large, young, disciplined, literate and organized population with low wages and an accomodating political elite. All currencies are manipulated. It's a meaningless statement.
- piker 1y ago
  Okay, those are good points, but I don't think the statement is meaningless. China, as I think most understand, deliberately pumped RMB into the market in a manner that made its resources available to foreign markets by trading a capital account deficit for a trade surplus. It's literally the first thing discussed in the RMB wikipedia page: https://en.wikipedia.org/wiki/Renminbi https://en.wikipedia.org/wiki/Renminbi.
  - bigyabai 1y ago
    Which is a completely fair play in a globalist society when you're a nation with an outstanding capital surplus. The US did this for centuries by exporting the dollar as a reserve currency, up until the gold standard ended and the value of the dollar as fiat started deteriorating. Imperial economics 101, really. Offer stability in one hand and demand compensation with the other.
- _heimdall 1y ago
  > All currencies are manipulated. It's a meaningless statement. That's probably (mostly) true today, but it wasn't always the case and it doesn't have to be that way. More importantly, just because most countries manipulate their currencies doesn't mean its meaningless to take issue with the practice or to notice when one country does it more aggressively than others.
  - hearsathought 1y ago
    Nobody does it more aggressively or less aggressively. It's done to an "agreed" upon level. Whether it is china, india, eu, japan, etc, every country pretty much sets the range. It's not like it is a secret. It's out in the open. Just like interest rates.

I've always understood China's currency manipulation to play an initial role in making it an attractive source of commodity products.

by piker 1y ago

I've always understood China's currency manipulation to play an initial role in making it an attractive source of commodity products.

ImHereToVote 1y ago

Why can't a sovereign state control their fiscal policy? Who should decide what the value of the Renminbi should be if not the PBC?

cma256 1y ago
The same reason a sovereign state can't act unilaterally in any domain -- diplomacy. If your actions affect another (or even just inspire interest) then the other party may make decisions which affect your country.
_heimdall 1y ago
Currency debasement is more monetary policy than fiscal policy I think. Either way I didn't read the GP comment as saying China can't do that, just that doing so is what gave them an edge long enough to gobble up a lot of our trade.

hearsathought 1y ago

China was an attractive source for the same reason vietnam and india are today. Large, young, disciplined, literate and organized population with low wages and an accomodating political elite. All currencies are manipulated. It's a meaningless statement.

piker 1y ago
Okay, those are good points, but I don't think the statement is meaningless. China, as I think most understand, deliberately pumped RMB into the market in a manner that made its resources available to foreign markets by trading a capital account deficit for a trade surplus. It's literally the first thing discussed in the RMB wikipedia page: https://en.wikipedia.org/wiki/Renminbi https://en.wikipedia.org/wiki/Renminbi.
- bigyabai 1y ago
  Which is a completely fair play in a globalist society when you're a nation with an outstanding capital surplus. The US did this for centuries by exporting the dollar as a reserve currency, up until the gold standard ended and the value of the dollar as fiat started deteriorating. Imperial economics 101, really. Offer stability in one hand and demand compensation with the other.
_heimdall 1y ago
> All currencies are manipulated. It's a meaningless statement. That's probably (mostly) true today, but it wasn't always the case and it doesn't have to be that way. More importantly, just because most countries manipulate their currencies doesn't mean its meaningless to take issue with the practice or to notice when one country does it more aggressively than others.
- hearsathought 1y ago
  Nobody does it more aggressively or less aggressively. It's done to an "agreed" upon level. Whether it is china, india, eu, japan, etc, every country pretty much sets the range. It's not like it is a secret. It's out in the open. Just like interest rates.