Instead of Carping
Over its Currency, West Should Thank China
Is the
West and first of all the United States lecturing China on revaluing its
currency, when the real problem lies in their own economies? According to this
editorial from China's state-run China Daily, these 'wealthy yet
debt-ridden countries' should be thanking their lucky stars for the
globally-beneficial economic policies of the People's Republic of China.
The rising Western cacophony over
China's currency policy is not a good omen for the fragile global recovery.
If the international community
is to find a credible way out of the worst global financial and economic crisis
in more than half a century, policymakers of major economies must stand firmly
against fallacies that advocate currency policy as an easy fix.
Two years after the collapse of
U.S. investment bank Lehman Brothers sparked a global meltdown, it's quite
disappointing that some wealthy yet debt-ridden countries continue to deny the
reality that what is badly needed is in fact a fundamental overhaul of their
economic and financial systems.
Even worse, by trying to
portray their domestic woes as chiefly a result of the currency policies in
other nations, some politicians in these advanced economies are hyping up
"currency wars" that could get put world economy, if not into a
no-win situation, then at best nowhere near a sustainable recovery.
As the world's largest
developing economy, China has done its best to lead the global recovery by
rebounding quickly back onto its track of rapid growth.
But despite the country's
remarkable and rising contribution to the global economy as a major growth
engine, some Western politicians irresponsibly blame China's currency policy,
which is a key stabilizer of its domestic growth and the global recovery.
Posted by WORLDMEETS.US
For instance, late last
month, the U.S. House of Representatives passed a bill that could pave the way to
sanctions on China for its currency policy. And this week, Chinese Premier Wen
Jiabao hit back at European pressure for a faster revaluation of the Chinese yuan.
Such global criticism reveals
an astonishing lack of appreciation for China's efforts to limit harmful
fluctuations of international financial systems that would significantly
depress economic activity.
By maintaining an essentially
stable exchange rate between the yuan and the U.S. dollar, the world's major
trade and reserve currency, China has served as a key stabilizer, cushioning
the global trade and financial systems against the crisis.
In the face of a global
meltdown, urgency is certainly needed, but that's no excuse for stupidity, such
as dismantling the few pillars that remain standing.
Moreover, some Western
politicians still promote the fallacy that their countries can export their way
out of the crisis by forcing other countries to revalue their currencies. This
indicates how far they are from grasping the scale of the problem, never mind
fixing it.
Though the global community has
so far succeeded in averting another recession through coordinated and
unprecedented stimulus programs, the global rebalancing is far from over.
Loose monetary and fiscal
policies in advanced economies might momentarily serve as a needed painkiller,
but they are no replacement for the difficult domestic restructuring that will
ultimately decide a country's economic viability as well as the value of its
currency.
Make no mistake, no country
can nor will build long-term success on currency devaluation.
