The brewing talk over the Yuan peg has become a major issue at the APEC conference in Singapore, at which President Obama is in attendance.
Reuters: The discord surfaced at a summit of the Asia Pacific Economic Cooperation (APEC) forum in Singapore when a reference to “market-oriented exchange rates” was cut from a communique issued at the end of two days of talks. An APEC delegation official said Washington and Beijing could not agree on the wording.
It’s time to start asking: why is China pushing back so hard against talk that it will let the Yuan appreciate at some point in the future?
The Beijing stock market had a monster year. GDP is growing like a weed.
Perhaps the central government is completely aware that the growth is a façade, just like that empty ghost city built out of stimulus dollars. Letting the Yuan appreciate would be a form of monetary tightening (and it would hurt exporters), and they want the world to know that they’re in no hurry to resume the path the country had started taking prior to the crisis.