Thursday, May 24, 2007
This post is not, strictly speaking (or even broadly speaking), law-related. But it bears on important issues in US-China relations on which there is a lot of misinformation and misunderstanding, even at the highest levels of policymaking. Here's an excellent article from the Economist pointing out that the current RMB-dollar exchange rate does not hurt the US, and that US unemployment - at close to its lowest rate in decades - is hardly a problem, let alone one for which China can be blamed. None of what article says is news, but it's a kind of knowledge that simply does not penetrate in some quarters. (Thanks to China Law Blog for the pointer.)
While I'm at it, may I make an undoubtedless useless plea for people to stop talking about the trade "imbalance"? Imbalance is a value-laden word that is impossible to think of as other than bad. The word "balance" in trade discourse means the same thing as "balance" in your bank statement: it just means "remaining amount" or "difference". A surplus or deficit between two countries is no more "imbalanced" than having a bank balance of $100,000 is "imbalanced". Using the word "imbalance" to describe a deficit or surplus implies that the ideal and proper state of trade between any two countries is always no surplus, no deficit. This is utter nonsense. What we really need is a whole new set of terms for talking about trade, so that we can get rid of value-laden and therefore misleading terms such as "balance," "surplus," and "deficit."