With little regard for Chinese customs, US President George W. Bush criticized China in a speech at a community school in Ohio State on Jan. 21, the first day of the Lunar New Year holidays. Bush reiterated the US' pursuit of free trade and demanded that the country's trade partners follow the trade principles of fairness and freedom. He singled out China, which enjoys a massive trade surplus with the US, as an example of a country pursuing unfair trade policies. The main cause of the trade imbalance, he said, was China's policy of keeping the yuan weak against the US dollar.
Bush's accusation reminds many people of a series of measures Beijing took to suppress the yuan from strengthening in the latter half of last year. After some defensive and offensive moves, the official value of the yuan remained unchanged and pegged to the US dollar, but China has also lowered export rebate rates to curb exports and maintain the yuan's value.
However, the pressure on the yuan to appreciate also remains. Many international media forecast at the end of last year that the yuan would appreciate early this year. Will Bush's comments help realize this forecast?
I believe everyone is eager to know the answer to this hotly debated issue. The so-called experts and professionals naturally will not miss this great opportunity to boost their reputation. The problem is: Is there really a standard answer? Who exactly has the power to make this decision? Why does this issue concern people so much?
As China is called the "world's factory," it is easy to understand why the yuan's value is in the international spotlight. Investors from around the world flock to China. Speculators also cast a greedy eye on the prey. China's magnetic pull on global funds offers clear proof of this issue's importance.
From the import and export of products to the inflow and outflow of hot money in speculative trading, everything is affected by the yuan's value. Any slight change results in enormous gains and losses. The yuan's fluctuation will only become an ever hotter issue as the Chinese economy grows. The likelihood of it triggering a domino effect is more than theoretical. In light of this, maintaining the stability of the yuan is reasonable. How to maintain its stability thus becomes a global issue. But is it possible to reach this goal?
Setting aside basic theories, everyone is clear that the fluctuation of the yuan is not just an economic issue, but also a political one.
Beijing tries to control the market with its "black hand" behind the scenes. This appears to be effective on the surface and in the short term. But in the end market forces will react, as is happening already.
This should be a familiar scene to those who have studied Taiwan's economic development in the 1980s. In 1986 the New Taiwan dollar rose sharply and was liberalized. Could this happen in China this year?
Wu Hui-lin is a research fellow at the Chung Hua Institution for Economic Research.
Translated by Jackie Lin
Two sets of economic data released last week by the Directorate-General of Budget, Accounting and Statistics (DGBAS) have drawn mixed reactions from the public: One on the nation’s economic performance in the first quarter of the year and the other on Taiwan’s household wealth distribution in 2021. GDP growth for the first quarter was faster than expected, at 6.51 percent year-on-year, an acceleration from the previous quarter’s 4.93 percent and higher than the agency’s February estimate of 5.92 percent. It was also the highest growth since the second quarter of 2021, when the economy expanded 8.07 percent, DGBAS data showed. The growth
In the intricate ballet of geopolitics, names signify more than mere identification: They embody history, culture and sovereignty. The recent decision by China to refer to Arunachal Pradesh as “Tsang Nan” or South Tibet, and to rename Tibet as “Xizang,” is a strategic move that extends beyond cartography into the realm of diplomatic signaling. This op-ed explores the implications of these actions and India’s potential response. Names are potent symbols in international relations, encapsulating the essence of a nation’s stance on territorial disputes. China’s choice to rename regions within Indian territory is not merely a linguistic exercise, but a symbolic assertion
More than seven months into the armed conflict in Gaza, the International Court of Justice ordered Israel to take “immediate and effective measures” to protect Palestinians in Gaza from the risk of genocide following a case brought by South Africa regarding Israel’s breaches of the 1948 Genocide Convention. The international community, including Amnesty International, called for an immediate ceasefire by all parties to prevent further loss of civilian lives and to ensure access to life-saving aid. Several protests have been organized around the world, including at the University of California Los Angeles (UCLA) and many other universities in the US.
Every day since Oct. 7 last year, the world has watched an unprecedented wave of violence rain down on Israel and the occupied Palestinian Territories — more than 200 days of constant suffering and death in Gaza with just a seven-day pause. Many of us in the American expatriate community in Taiwan have been watching this tragedy unfold in horror. We know we are implicated with every US-made “dumb” bomb dropped on a civilian target and by the diplomatic cover our government gives to the Israeli government, which has only gotten more extreme with such impunity. Meantime, multicultural coalitions of US