Reaction: Barking Up The Wrong Tree, Monetarily

Why would Nick Edwards waste the ink? While we thankfully don’t really need to worry about the question of whether or not Romney would have named China a “currency manipulator” on day one, one has to still wonder why this is even a topic given the situation on the ground.

Nick Edwards, in his November 6 article from the International Herald Tribune gave a lengthy discussion of the pros and cons of presidential candiate Mitt Romney’s promise to label China a currency manipulator. So much effort and ink is wasted explaining issues that should be recast in light of recent facts.The question is: why waste the breath, the ink, the mental effort? By looking at a few facts on the ground, we can see that currency manipulation cries are out of step with the times. They don’t reflect the actual situation between the two countries’ economies. While there may be some disagreements on the specific details, we should nevertheless note the general trends.

For example, I’ve cited before a couple articles concerning the RMB’s apparent approach toward parity: “China’s Currency Rises, U.S. Keeps Up Pressure” and “Hot Topic in Debate, Truth Nuanced.”  Additionally, there is growing recognition of the amount of debt at provincial and local levels, for one example “Boom Town Going Bust” discussing DongGuan, the heart of the “World’s Factory.” And many of Patrick Chonvanec’s articles on similar topics, perhaps this one being an excellent case in point: “Three Things US Politicians Need To Know About China.”

Simply put, most seem to ignore progress made by China on policy requests like currency. And are ignorant of real economic