Folly of China bashing.

• Author: Rees, Matthew
• Position: China

"Suppose that China did capitulate and let the renminbi appreciate briskly. What would that do to America's current account deficit? The answer is: not much. Morris Goldstein, another Peterson Institute hawk on China, acknowledges in a recent working paper that the U.S. economy is running at full employment, so if China's manipulated currency is exporting unemployment, those particular exports must be going somewhere else. Moreover, as Mr. Goldstein points out, the renminbi's weight in the trade-weighted dollar index is just 15 percent. A 20 percent appreciation would provide a meager 3 percent devaluation of the trade-weighted dollar. That would improve the U.S. current account deficit, which was $850 billion last year, by maybe $50 billion."

"Mr. Goldstein...