This debate is too simplistic. Embedded complex global value chains mean that the impacts of exchange rates are simply not as straightforward as mainstream arguments would lead people to believe. Those who argue for RMB appreciation in the name of reducing China’s trade surplus could well be disappointed as the appreciation paradox kicks in. That’s not a reason for China to not contemplate a progressive staged appreciation but western analysts need to be careful, very careful, what they wish for. See my recent essay: https://open.substack.com/pub/warwickpowell/p/hold-your-horses?r=1p62fw&utm_medium=ios&shareImageVariant=overlay
Dr. Warwick makes a noteworthy criticism here in noting the article is strictly hopeful, not pondering over any possible risks. Otoh, his argument misses the crucial point that the current environment is fraught with risk; that rebalancing is thus mandatory, as the CPC itself has often stated.
How that will all play out is left to be seen, though I do wonder if China can withstand Western pressure against it if it doesn't allow RMB appreciation, without needing to face some of the severest contingencies it has long been trying to avoid, how those could play out, and indeed, how much longer China will have the nerve to call itself "socialist" while collect less tax revenue as a % of GDP than the "capitalist" U.S.
Is it not time to finally begin repaying the working class that built modern, wealthy China, after so much effort and sacrifice?
The 2025 U.S. NSS clearly shows Western Neo-Fascists are out for the governance architecture that allowed China to become what it is today. China must be weary in the coming years. Maybe it has the next year as another lukewarm year, though the ME will remain a powder keg. How will it safeguard its interests in Latin America in the face of an increasingly despotic Western Neo-Fascist alliance?
With all due respect to Dr. Warwick: now, like in other times throughout Chinese history, in my opinion it doesn't seem like the time for excessive conservatism.
Would love to hear about the risks of implementing Mr. Lian Ping's suggestions as well, in the spirit of open and philosophic debate.
This debate is too simplistic. Embedded complex global value chains mean that the impacts of exchange rates are simply not as straightforward as mainstream arguments would lead people to believe. Those who argue for RMB appreciation in the name of reducing China’s trade surplus could well be disappointed as the appreciation paradox kicks in. That’s not a reason for China to not contemplate a progressive staged appreciation but western analysts need to be careful, very careful, what they wish for. See my recent essay: https://open.substack.com/pub/warwickpowell/p/hold-your-horses?r=1p62fw&utm_medium=ios&shareImageVariant=overlay
Good article CBAN.
Dr. Warwick makes a noteworthy criticism here in noting the article is strictly hopeful, not pondering over any possible risks. Otoh, his argument misses the crucial point that the current environment is fraught with risk; that rebalancing is thus mandatory, as the CPC itself has often stated.
How that will all play out is left to be seen, though I do wonder if China can withstand Western pressure against it if it doesn't allow RMB appreciation, without needing to face some of the severest contingencies it has long been trying to avoid, how those could play out, and indeed, how much longer China will have the nerve to call itself "socialist" while collect less tax revenue as a % of GDP than the "capitalist" U.S.
Is it not time to finally begin repaying the working class that built modern, wealthy China, after so much effort and sacrifice?
The 2025 U.S. NSS clearly shows Western Neo-Fascists are out for the governance architecture that allowed China to become what it is today. China must be weary in the coming years. Maybe it has the next year as another lukewarm year, though the ME will remain a powder keg. How will it safeguard its interests in Latin America in the face of an increasingly despotic Western Neo-Fascist alliance?
With all due respect to Dr. Warwick: now, like in other times throughout Chinese history, in my opinion it doesn't seem like the time for excessive conservatism.
Would love to hear about the risks of implementing Mr. Lian Ping's suggestions as well, in the spirit of open and philosophic debate.
Best regards to all,
Rafael