This & That, Ceci et Cela

Pressure to make the yuan more flexible has come from the United States and other members of the Group of 7 industrial nations, who say the peg to the dollar gives Chinese manufacturers a price advantage that has helped drive the U.S. trade deficit to a record level and threatened economic growth in Europe. The currency is fixed at 8.3 yuan per dollar.

But others counter “If China let the yuan appreciate by 20 percent, and most other Asian currencies followed suit, the deficit would probably decline by only about one-fifth over the next year or two. That’s not nearly enough to bring the American trade imbalance into a range that is generally considered sustainable” (IHT).