Suddenly, all the debates between the U.S. and China on the currency became very interesting. Inspired by the changing course of the White House and with the November mid-term elections as a potential threat to maneuver the Democrats, party leaders clearly decided that the accusation of China on the currency will help win some votes in the struggle. Lawrence Summers, to this day, this is an intellectual leader on economic issues Obama administration, became the main victim of this political shift. Free to follow China, the White House Speaker Nancy Pelosi, urged the House to vote next week on the issue of the Department of Trade greater force on unfair trade policies, including the recognition of currency manipulator.For its part, China does not recede back to defend their position. The comments American business leaders in New York last night, Prime Van Dzyabao pointed out that "the main reason the U.S. trade deficit - it is not China's currency policy, but the structure of investment and savings." He also noted that 20% appreciation of the yuan will become a big problem for China, leading to massive loss of jobs and potentially destabilize the social situation. To those who think that China is now ready to allow the yuan to rise in coming months, need to think again.
U.S. embarked on a dangerous game with the high political stakes, where economic rationality stands in first place. It will be much better for the U.S. to focus on broader trade policy in these debates where their intellectual position is much stronger than on the currency. In the next few months, this issue will be dominant. After the midterm elections, we can see the concentration of energy in the direction of improvement for U.S. companies on China. Trade war is still unlikely. The U.S. and China is still a lot of mutual interests.
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