From Wall Street Journal:
If China’s exchange-rate policy is a speedometer for the government’s move toward market economics, the shift appears to be accelerating.
Thanks to a surge in recent weeks, the yuan is set to end 2007 up nearly 7% against the dollar — twice the amount it appreciated against the U.S. currency in 2006 — and economists forecast a similar pace of upward movement in 2008. That could help cool down the red-hot growth in the world’s third-largest economy.
Some analysts see the apparent policy shift as a sign of confidence. One reason the government seems more willing to move now is that Chinese exporters are so far surviving the effects of pinched profit margins resulting from the pricier Chinese currency — important because maintaining jobs in the huge export sector is a priority of China’s leadership. [Full Text]
