The Rocky Road to Globalization<\/p>\n
Ana Swanson writes: China surprised the world by devaluing its currency, in a move\u00a0likely to boost Chinese exports and support the country’s flagging economic growth.\u00a0The change to the currency’s value was the most dramatic one-day change in two decades.<\/span><\/p>\n The move is likely to stir intense concern, as\u00a0political leaders, especially in the United States, have long complained that China leaves\u00a0its currency at a lower value to boost its domestic industries.<\/span><\/p>\n Over the past decade, China has let the value of the currency, known as the\u00a0yuan or renminbi, rise, but the announcement by China’s central bank Tuesday is sure to reignite debate over whether the country is giving an unfair advantage to its businesses.<\/span><\/p>\n Stephen Roach, a fellow at Yale University who formerly served as a non-executive chairman for Morgan Stanley in Asia, said the move raised the \u201cpossibility of a new and increasingly destabilizing skirmish in the ever-widening global currency war.\u201d<\/span><\/p>\n The Chinese economy slowed to 7 percent year-over-year growth in the first quarter, the slowest pace\u00a0in six years. Exports plummeted\u00a08.3 percent year-over-year in July, according to data released last weekend.<\/span><\/p>\n But the Chinese central bank argued on Tuesday that its goals were more mundane than spurring exports and growth. Rather, the bank said that the change was a one-time event to allow it to set exchange\u00a0rates in line with free market practices.\u00a0And in their initial responses, many analysts agreed.<\/span><\/p>\n Like many things in China\u2019s economy, the country\u2019s currency is controlled by a mix of market forces and government decree. \u00a0China Races to the bottom?<\/strong><\/a><\/span><\/p>\n \n","protected":false},"excerpt":{"rendered":" The Rocky Road to Globalization Ana Swanson writes: China surprised the world by devaluing its currency, in a move\u00a0likely to boost Chinese exports and support the country’s flagging economic growth.\u00a0The change to the currency’s value was the most dramatic one-day … Continue reading