Brad Setser: Exchange rate adjustment is vital for China to balance global trade

Brad Setser: Exchange rate adjustment is vital for China to balance global trade
Exchange rate shift needed for China trade

Brad Setser highlights the importance of exchange rate adjustments in bringing more balance to China's global trade. According to Setser, domestic demand growth in China no longer spills over into increased demand for European and other international goods.

He notes that without a rise in imports, any rebalancing in China's trade must come from slowing export growth.

Setser previously identified sharp swings in gold and pharmaceutical trade linked to anticipated tariffs that were not implemented, as reported in an earlier article. He has also discussed China's manufacturing surplus exceeding $4 trillion, with a customs surplus over $2.5 trillion, driven by strong export performance in a separate report. These observations provide context for current concerns around trade balance and exchange rate policy.

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