Question Does china 🇨🇳 devalue their own currency?
@BrianUrlacherPoliSci
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China has a limited floating exchange rate. So while the RMB moves from about 6.5 to 7.5 Yuan per dollar that rate is only partially driven by markets. From 2001-2008 China was exporting way more to the US than it was importing. If market forces were just left to do their thing, the RMB would have gotten stronger relative to the dollar (probably falling well below 6.5) The fact that it didn't is often pointed to as evidence of China devaluing their currency to maintain a competitive trade environment. Since the Great Recession things have been a lot more complex. China has had financial problems internally, COVID shredded global supply chains, growth has slowed, and China undertook a massive global investment program (OBOR) financed much to the dismay of China's economic planners with excess USDs. The RMB has certainly weakened relative to the dollar but I'm not sure if that represents intentional devaluation of the currency like it did in the early 2000s or if it is just the economic hand China is currently playing.
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