Tuesday, October 25, 2011
China's economy is slowing to a "mere" 9.1 percent growth, it's slowest in 20 years. Does this bode at all well for the US? Most theories of current accounts would say no. Also, although the nominal exchange rate with China is pretty level recently, the real value of the yen (after inflation) is rising. This suggests rebalancing, which is supported by the fact that China will soon have a trade deficit with the rest of the world (although probably not with the US). I wish politicians (and the public?) would pay more attention to these facts before forging ahead with proposed "retaliatory" (to what?) tariffs against China.