International Law

What's Going On With China's Currency? I Dunno.

By Dan

A few years ago, I promised to write about anything that generated at least five shows of interest from readers. There have been times I have regretted that promise, but none more so than now.  I have received five emails from readers asking for our views on the recent currency issues and I even received and rejected a post on that from one of my law firms summer associates.

I have a real problem writing about China's recent currency moves because I am not an economist. I took a whole slew of economics courses in college, including all of the core courses for a major, but I fell one fluff course short. I love economics and I fashion myself as an armchair economist.

But, the impact of currency fluctuations is incredibly difficult to predict and there is absolutely no reason why anyone should listen to my views on that when there are so many people out there who study these sorts of things for a living.  And even they, when pushed, would admit it will be difficult to make predictions on most of the central issues relating to China's currency.

The only thing I will say is what I have been saying about China's economic policies as a whole since the very inception of this blog: China's government is first and foremost concerned about maintaining the harmony of its people and its own legitimacy. It will not compromise those things any more than is absolutely necessary. This is true of its currency as well. China's government is not going to do anything with the Renminbi/Yuan (RMB) it believes might impair harmony or its own standing. Plain and simple. What this will mean in the way of numbers, bands, impact, linkages, etc., I do not know.

If we assume the Yuan will strengthen over the next few months, how will that impact YOUR business?  

Full post as published by China Law Blog on June 29, 2010 (boomark / email).