China as Scapegoat, Again

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Includes: CYB, FXI, PGJ, UDN, UUP
by: Ricard

Here's an excellent example of 'spin' deflecting what really should be the story of the moment - how other Asian economies have been given a free ride off the dollar's strength in the face of a global meltdown.

[Currency]

Instead, the focus on the article is how China continually pegs its currency against the dollar.

What I find interesting is that had China instead *devalued* their currency upwards of 20% like South Korea, Thailand, or Malaysia (justifiable given their own meltdown in exports), Congress would have gone bonkers. Unfortunately, instead of the focus on currency manipulation by other countries, or China spending its own reserves to stimulate its economy amid a weakening Asia, the focus is placed on China's dollar peg. Can anyone spell 'scapegoat'?

A comment posted on the article says it all:

This article is a model of incoherence. What are the Koreans complaining about? The chart in the article shows that the won continues to trade at a 20% depreciated level versus the renminbi. The won looks even weaker relative to regional manufacturing rivals like Japan and Taiwan. If anything, it should be the Chinese complaining about the Koreans. Perhaps South Korea can explain why it has bought $50 billion USD in the past 3 months to thwart gains in the won. Strange behavior for a country with the largest current account surplus it has had in a decade, and a surging export sector. Does the Korean language have an idiom for "the pot calling the kettle black"?