The surprise that wasn't (yuan/dollar)

[donsu]

http://www.atimes.com/atimes/China/GG29Ad02.html


As the world now knows, following a slight falloff in currency speculation in June and July, Beijing announced an instant revaluation of the yuan July 21, allowing it to appreciate by 2.1%, to 8.11 yuan per US dollar

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The financial markets and global press reported last Thursday's developments as a "surprise". But was it? With the benefit of hindsight, there were numerous subtle signs tipping off the Thursday financial quake. On March 14 of this year, Premier Wen Jiabao stated that lifting the yuan-US dollar peg would be a "big surprise", and on several other occasions, he reaffirmed that China's monetary policy would never succumb to pressure from abroad.

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It would be a lot more jaw dropping if Washington turned out to be ill informed of Beijing's yuan adjustment. As many had predicted, the revaluation proceeded ahead of President Hu Jintao's US visit, scheduled for September, as if it had been intended to clear the way for Hu. In fact, it appears that at least some high-ranking US officials were given private assurances that action on the yuan would be forthcoming in the near future. In this connection, it is interesting to recall that US senators Charles Schumer and Lindsay Graham, who had introduced a bill in June calling for imposing 27.5% tariffs on all Chinese exports to the US if the yuan remained undervalued, changed their minds and delayed the vote on their bill after a meeting with Treasury Secretary John Snow and Federal Reserve Chairman Alan Greenspan earlier this summer, saying that they had "confidence in the administration to address the issue". According to a July 15 report in the British Financial Times, Snow told the two senators that Beijing was going to revalue the yuan in August, but China's central bank denied this, saying there was "no fixed timetable".

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machinations continue

[SlipperySlope]

1. The only surprise...

The timing might have been a surprise to some, but everyone knew this had to happen. Just like everyone knows that it is going to happen again soon.

[sweetheart]

2. The messages can be read together

The chinese government re-pegs its relationships to all world economies
and not just the USA. It increases its military budget and "asks" to
buy unocal (with its asian assets speckled all around its borders) at a
fair price; and then there is pressure to close american bases in central
asia... its a collective message of yankee go home..

A russian/indian/chinese monroe doctrine of asia is on the make.