Graph of the Day: Annual RMB Export Growth vs. RMB-USD Appreciation
This graph comes via the Council on Foreign Relations (hat tip James Fallows).
The Chinese were implementing a gradual revaluation before the credit crisis. They stopped revaluing their currency versus the USD in 2008. And immediately two things happened.
- Household spending growth plummeted
- Exports surged
The question for everyone is whether this is currency manipulation and, if it is, what to do about it.