Less than 16 hours after the Chinese yuan revaluation everyone, from Shanghaiist to politicians to economists, is still scratching their heads and making wildly diverging guesses about what exactly the 2.1 percent nudge means.
One common view is that the small move was too tentative, and can only be the first step leading to further revaluation, acting as a signal to speculators to keep pumping up already dangerously inflated sectors of the Chinese economy. Some recognize this “tiniest and smallest move” for the mere, political gesture that is was — an effort to buy more time when it comes to prickly US-China relations. Others who have watched the escalation of hawkish statements on both sides of the Pacific with trepidation are just relieved that China made the first move towards diffusing the mounting tension. Some members of Congress probably don’t have any warm, fuzzy feelings towards China’s small concession. Of course, if it had been up to certain politicians, a 27.5 percent tariff would have been placed on all Chinese goods coming into America — a very bad idea, according to Alan Greenspan.
Well, America and the world got what they had been clamoring for, even if the revaluation wasn’t quite as significant as many had hoped. Shanghaiist hopes China doesn’t really think 2.1 percent is going to make life as a rising, international power any easier.