Thanks for the clarification. WTH is wrong with Heritage nowadays?
“WTH is wrong with Heritage nowadays?”
It is a valid argument, that a fair market valuation of China’s currency would result in it being valued lower.
But that is different from saying that China does not manipulate its currency. Both can be true, and are.
Treasury was not wrong to say that China is a currency manipulator, AND, the free market would devalue the Yuan more if it truly floated freely.
China has been supporting its currency from devaluation for the last few years, with a host of measures, including harsh capital controls, and direct interventions in the market.
They brag that they have developed a powerful suite of tools that allow them to effect the exchange rate of the Yuan, without relying on using their foreign exchange to directly intervene in the market themselves (like ordering their big businesses to take or refrain from actions).
It was a deliberate Government policy move to let the Yuan weaken over 7 to the dollar, to offset tariffs, and that is a violation of trade rules.