Misunderstanding China's currency manipulation

David Goldman:
Alice in Trumperland and China’s Currency

“There’s a trade war on with China, and we’re losing it,” radio talk show host Laura Ingraham hectored Sen. Ted Cruz, who opposes legislation to punish China for alleged currency manipulation. “Ted, you’re on the wrong side of history on this issue,” Ingraham added. Ms. Ingraham somehow had made her way to the wrong side of the looking-glass, where everything is backwards.

For those of us on the right side of the looking-glass, that is, in the real world rather than Trumperland, the opposite is the case: China’s real effective change rate (the trade-weighted exchange rate adjusted for differences in inflation) is twice as high as it was 20 years ago, and 40% higher than it was in 2008. China’s currency has been going up, and not down.
Goldman supplies charts to support his argument and points out that Chinese exports to the US have hardly grown at all since 2008.  Trump and his supporters appear to be fighting a battle that has already been won on the currency front.


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