September 10th 2006
China and Japan discuss currency appreciation
For the first time, officials from China’s Central Bank will meet publicly with their counterparts in Japan, a nation that knows a thing or two about currency appreciation. Over 20 years ago, the world’s industrialized nations signed the Plaza Accord Agreement, which laid out a plan for devaluation of the USD against the Japanese Yen. The purpose of the agreement was to help the US stem its current account deficit and simultaneously emerge from an economic recession. [Note the similar circumstances which currently surround the attempt by the US to depreciate the USD against the Yuan.] Anyway, the result of the agreement was a Japanese recession, and ultimately, an asset price bubble which continues to plague Japan to this day. Chinese officials hope to learn from Japan’s travails and avert a similar economic implosion.
Read More: China seeks to learn from mistakes of 1985 Plaza Accord
September 10th, 2006 at 9:37 pm
If China happens to follow in the footsteps of Japan did in the Eighties of the last decade to appreciate Yuan asper the U.S. requests, China would definitely be thrown into an Economic Turmoil that would kill its Economic Reform prematurely and the glory of the China Remergence would fizzle out quickly…..China must bear that in mind. Yes, in the long run, we are all dead but in between, we still need to survive and sustain.
Steve