The MoC, the PBOC, and the RMB

China’s Exchange Rate Politics | Center for Strategic and International Studies.

In a study subtitled “Decoding the Cleavage between the Chinese Ministry of Commerce and the People’s Bank of China,” Charles Freeman and Wen Jin of the CSIS explain how those two ministries are the lead protagonists in the battle over both currency revaluation and the restructuring of the economy.

The scholars do not reach any specific conclusions, but they do lay out the respective views of the two agencies, their roles in the debate, and in so doing attempt to determine how the debate will translate into concrete policy.

If you read the headlines in China, the PBOC seems to be winning: the RMB is on a gradual devaluation path, and factory owners in eastern China (especially Wenzhou) are feeling the pain. What makes this study particularly interesting, though, is the hints it offers as to how currency policy might change in the face of major domestic dislocations.

What I like best about this short but sweet piece is that it properly frames the debate over the valuation of the RMB as a domestic Chinese debate, not a global one. The government is not a monolith, and Americans who seek the devaluation of the RMB have allies in China.

Advertisements

One thought on “The MoC, the PBOC, and the RMB

  1. Pingback: Interesting Fixes Around The World for today, June 16, 2011

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s