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November 21, 2005
Yuan yawn...Status quo for now...

When the biggest two news items during President Bush's China trip were his bike ride and his attempt to exit a locked door, it's clear any contentious conversations happened, well, behind that locked door. This is good news, especially on China's currency, the yuan. Both the U.S. and China reiterated their basic views, without directly contradicting the other side. President Bush said in his press conference with President Hu Jintao that "We'll continue to work with China to help implement its July commitment to a flexible, market-based currency." But Yi Gang, an assistant central bank governor, said that "China would keep the yuan basically stable...." The status quo of stable exchange rates is good for now, though at some point the U.S. will have to wise up, accept this arrangement (if not endorse it), and take a stand against the masochistic Schumer-Graham tariff legislation, which seems to rear its ugly head every other month.

-Bret Swanson

Dotted Divider Line

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