China’s Yuan Will Suffer More

China’s Yuan Will Suffer More
A staff member counts yuan (renminbi) at a bank in Haian, Nantong city, East China's Jiangsu Province, on May 15, 2022. CFOTO/Future Publishing via Getty Images
Milton Ezrati
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Commentary

China’s yuan has slid against the dollar. Three things account for this: 1) interest rates in the United States and elsewhere are rising while rates in China are declining; 2) although all economies are slowing and indeed seem on the verge of recession, China’s economic and financial problems seem more fundamental and present greater uncertainties; 3) geopolitical troubles—especially in Europe but also in Asia—are driving money into the relative safety of the dollar. All these pressures seem set to persist and weigh on the yuan. In the process, China’s economy will become more export-dependent than ever—not at all what Chinese leader Xi Jinping wants.

Milton Ezrati
Milton Ezrati
Author
Milton Ezrati is a contributing editor at The National Interest, an affiliate of the Center for the Study of Human Capital at the University at Buffalo (SUNY), and chief economist for Vested, a New York-based communications firm. Before joining Vested, he served as chief market strategist and economist for Lord, Abbett & Co. He also writes frequently for City Journal and blogs regularly for Forbes. His latest book is "Thirty Tomorrows: The Next Three Decades of Globalization, Demographics, and How We Will Live."
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