From Econbrowser:
The Renminbi (RMB) is probably undervalued, according to some criteria. Would adjusting it fix the US-China trade deficit? Or the overall US trade deficit?
China looms large in the world economy. There is lots of talk about Treasury Secretary Paulson pushing more deftly to achieve greater RMB appreciation. In my view, if he’s successful, this would be a good outcome for the U.S. and world economy.
While I discussed this issue recently, I thought a closer look at the data was warranted after the trade release for June came out. The figure below confirms that the annualized bilateral trade deficit with China has widened in recent months, even as the Chinese RMB has appreciated in real terms.[Full Text]
