Isn't the Chinese Yuan undervalued by China by some 27%?
I suspect if they allowed it to flourish at the rate it's worth, there wouldn't be much debt to worry about.
Then again, the implications of allowing the Yuan to be traded at the actual value would raise the cost of Chinese goods in America to eventually raise by that amount in price, so it'd hurt them eventually. Imagine the screams of the America consumer as the cost of cheaply made Chinese goods suddenly raise by that amount overnight...
It will be interesting to see how President Bush follows through with his demands that the Chinese stop devaluing their currency. There is all sorts of talk of trade tariffs and other economic sanctions. Then again, for any of this to actually occur, the basic assumption would be that most of the Republican congress and Senate are vertebrates.
that could be the plan after all, except that they didnt think the chinese would stonewall on them.
For communists, they certainly have capitalism down, don't they? :)