Yulia Slavina

China's currency weakness and import gap are unresolved issues, Brad Setser notes

China's currency weakness and import gap are unresolved issues, Brad Setser notes
China keeps currency weak despite demand

Brad Setser highlights concerns about China's current economic situation.

He points to ongoing weakness in China's currency and suggests that authorities are intervening, based on settlement numbers, to maintain its lower value. Setser also raises questions about the significant gap between China's reported domestic demand growth and the growth rate of its imports.

Setser has previously analyzed other major economic interventions. He recently described how Japan reduced its gross government debt by selling dollar reserves for yen at higher exchange rates. In a separate note, Setser pointed out that lost tax revenue on U.S. rents could cover a significant increase in defense spending.

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