Quote:It's odd how you and Kandrathe can agree, when you refer to Paulson to proof your point while Kandrathe claims that this same Paulson is in denial. One of you must be reading things wrong.Kandrathe is claiming that Paulson is being a lily liver by not calling the Chinese out directly on their currency manipulation. I am saying that he is doing it indirectly, but not pushing the envelope as far as he might for diplomatic reasons. We're both saying that everything we've read so far says the same thing: that China is holding down the Yuan, whatever you want to call that, "manipulation" or otherwise.
Quote:"However, the Treasury's conclusion that China is not manipulating its currency 'is hardly a bombshell' given that is what it has found repeatedly, an aide to Senate Finance Committee Chairman Max Baucus, a Montana Democrat, said."... you're reading Senator Baucus' comments backwards. He doesn't mean that China isn't manipulating its currency. He means that it isn't surprising that Paulson hasn't said so, because he's soft on China, and isn't doing enough in the face of what Baucus thinks is obviously protectionistic manipulation. Give him a lookup, he's probably the most aggressive member of the Senate on this issue.
Quote:The purpose of the report is determine if US trading partners are undermining trade competitiveness. The conclusion is that there are none doing so.... while they simulaneously push the Chinese government as hard as they can in negotiations to let the Yuan appreciate. This is diplomatic language, not factual analysis. The Chinese are notorious for being skittish about direct confrontation, and Paulson calling them out directly would hinder, not help, his attempts to get the Chinese to let the Yuan float up.
Quote:The rest is recommendations for improvement, as in the last report. You can insist that they left out accusations for diplomatic reasons as much as you like, but the fact remains those accusations are not in the report.The fact remains that what Kandrathen and I have been claiming China is doing, that report also claims they're doing, right in the passage I just quoted you. The only difference is whether the word "manipulation" appears or not. It appears the Treasury has their own internal definition of what "manipulation" is; I don't. If the Chinese are using capital controls to hold the Yuan down, they're manipulating their currency.
The obvious political issue here is that, if Paulson *did* call it manipulation, it would trigger section 3004, enabling Congress to pass protectionistic legislation in retaliation. Since Paulson doesn't want that (and I think I might be with him on that point), he is not calling a spade a spade. I am not under such pressures, and can call it like I see it.
Quote:So you finally found a document that somewhat supports your claim. I do wonder why this general thread assessment report is more reliable as the previous sources, in your view. I suppose you also agree with statements like the following?*Finally*? Every document that's been linked in this accursedly long thread has said exactly the same thing: China is holding the Yuan down! Some are very bold about it, and accuse them of direct protectionism. Others are sympathetic, and think that China is doing it for good reasons, but doing it nonetheless. Yet others are trying to walk a fine line, suggesting that they revalue upwards and get rid of currency controls, but stop short of making direct accusations. But everyone is in agreement on the main point: the Yuan is being held down by China!
-Jester
Afterthought: Hey, an economist who disagrees! At Stanford, no less. http://www.stanford.edu/~mckinnon/