Laobaixing against RMB Appreciation

Central bank heads and governors Henrique Meirelles (Brazil) and Duvvuri Subbarao (India), and Singapore’s prime minister Lee Hsien Loong made the most forceful statements to date in demands for a stronger Chinese currency, the Financial Times reported on Wednesday. A few days earlier, the New York Times reported that the Chinese government was preparing to announce in the coming days that it will allow its currency to strengthen slightly and vary more from day to day. Liu Bin (刘斌), of the Southern Metropolis Daily, sums some Financial Times analysis (“金融时报”文章综合整理分析) up:

Nobody foresaw that, just after chairman Hu Jintao (胡锦涛) had taken part in the “BRIC” conference, in the twinkling of an eye, India and Brazil, China’s BRIC “comanions”, would actually strike the same note as America and strongly demand a RMB appreciation. All of a sudden, a tilt occurred in the sino-western confrontation about the RMB’s exchange rate.

But what is more noteworthy are Obama’s diplomatic means. He has abandoned his predecessor’s hegemonial way of applying unilateral force China to lower its head, and rather convinces the emerging economies to join a big chorus of demands to appreciate the RMB.

Of course, maybe India and Brazil aren’t just speaking in support of America. They obviously believe that an appreciation of the RMB will help their own economies, or help to solving global economic imbalances. China’s exporters can, of course, curse the two countries for becoming America’s accomplices, but we should see clearly that, the technical argument about RMB appreciation aside, there is no doubt that China’s international public relations are facing a test.

This is because China’s traditional diplomatic measure of aligning with third-world countries to resist American pressure are now flexibly turned onto China itself by Obama. One can say that the pressure India’s and Brazil’s attack have added are more important than America singling China out as a currency manipulator.

It’s actually foreseeable that more developing countries will join this chorus, that China’s international public relations will face more pressure, because Obama’s flexible diplomacy is a mellow measure with unmistakable effects.

The online commenters don’t see eye to eye:

1. Currency appreciation is related to sovereignty, it’s the Chinese laobaixing and Chinese businesses who have to decide, and not other countries or groups of countries. Whatever the chorus of other countries says, it’s futile at best, futile. The finishing touches to this piece [a work of art] haven’t yet been made, and they hope it won’t be a big one [literally: the eyes haven’t yet been painted onto the dragon yet, and they all hope it will be a small eye – i.e. a botched opus]. This is the western-led and international anti-China forces’ consistent method.

6. India is just a jumping clown, making thankless poor performances before the developed European and American countries! The sad thing is that Brazil, all of a sudden, is also blinded by lard on its eyes! They have forgotten how the developed countries grab their national interests.

8. Once you get used to it, it won’t hurt anymore (习惯了就好).(…..)
10. The question of RMB appreciation isn’t only a matter of sovereignty, but also one of human rights. Since the design of the Chinese people’s livelihood is related to the livelihood of the world, in this world, human rights are a bigger matter than sovereignty.

11. Every country has its own interests, it’s no use to tell them what to do.9. I’m a bit shallow – can one subjectively say that China’s diplomacy is becoming more and more disappointing? Can one say that China’s current officials are becoming more incapable?

12. Why should China assume this responsibility? Won’t we, the laobaixing, be the ultimate victims? (那我们老百姓不就成了最后的受害者吗?)

Comment 18 begins to look at the technical issues of revaluation, rather than historical ones.


北京颐和园-画龙, (look at the big eyes), Phototime

3 Responses to “Laobaixing against RMB Appreciation”

  1. If you think about it, it is a rather odd argument to say that the unilateral RMB peg to the dollar is a question of sovereignty, since it has such effects on the US domestic economy. I wonder if the Chinese would accept the argument that slapping high duties on Chinese imports is a question of US sovereignty.


  2. Only China has sovereignty. Other countries have ulterior motives.



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