Doesn’t that assume that they would continue to sell us and others stuff at the same rate, were that to happen? Clearly that would not be the case. That’s the same as Dems thinking that purchasing of goods won’t change despite a tax increase.
That’s exactly the point. IF they let their currency fully float, then Chinese goods would automatically become 30% more expensive, which means that lower-end Industries would shift away from China to even lower wage countries in South Asia or Africa.
But in reality, they would have to slowly float their currency regardless of what we do. China’s problem is that it’s running out of people with a basic high school education willing to work for $10 a day.
China is still 7-10 years behind the U.S in terms of cutting-edge technology. China needs to fully float it’s currency, but it’s trying to avoid doings until it achieves rough technological parity with the U.S and EU.