With the US finally getting serious after a decade of promising to, the US House of Reps passed a bill last night by a wide margin (348 for to just 79 against) that would allow the US to levy tariffs on countries that undervalue their currencies. The bill of course has to get through the Senate which is a story we will leave for another day but lets just say its politically palatable at the moment for both sides to “bash” China prior to the mid term elections.
We of course got a few gems in response from Chinese officialdom. One of the best was from the Commerce Ministry who say….China has never undervalued the Yuan exchange rate to gain a competitive edge”………OH REALLY. China is now the world second biggest economy with a fixed exchange rate that requires the central bank to intervene every day to buy US Dollars. Hmmmm. What does NZ think about all this. This is a country of 4.4 million people who have a freely floating currency. Whose kidding who…………
