Strong Yuan: Good for Poor Nations?

China’s trade balance is on course for another bumper surplus this year. Meanwhile, concern about the health of the US economic recovery continues to mount. Both developments suggest that China will be under renewed pressure to nudge its currency sharply upward. The conflict with the US may well come to a head during US Congressional hearings on the yuan to be held this month, where many voices will urge US President Barack Obama’s administration to threaten punitive measures if China does not act.