The yuan ‘Plaza Accord’ would barely dent China’s edge
Structural reforms are what’s needed to blunt Beijing’s cost advantages in production, not currency tinkering
[LONDON] Big problems invite simple fixes, and there is a risk that Western policymakers are starting to treat the yuan as a big problem.
Force Beijing to revalue the currency, the thinking goes, and the hollowing out of global industries caused by cut-throat Chinese competition should begin to reverse.
But China’s cost advantage is so vast that counteracting it is impossible without bold industrial policies and even some targeted protectionism.
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