Amherst Pierpont's Sinche on China's Currency Policy

The video discusses China's strategy to maintain currency stability by resisting the dollar's depreciation. It highlights China's smoothing operations to manage currency fluctuations and the economic and political implications of these actions. The video also touches on the dynamics of US-China relations and their impact on currency and political strategies.

What is one reason China might intervene in the currency market?

• To promote economic instability

• To decrease their foreign reserves

• To stabilize their currency against the dollar

• To increase the value of the dollar

How has China managed its currency during periods of dollar strength?

• By allowing their currency to float freely

• By spending money to prevent their currency from weakening

• By increasing interest rates

• By reducing their foreign reserves

How does China view the importance of stability in its economic policies?

• Stability is not a priority

• Stability is crucial for economic growth

• Stability is only important for foreign relations

• Stability is irrelevant to currency management

What is a potential benefit of China's currency management strategy?

• It reduces foreign investments

• It introduces flexibility to monetary policy

• It increases economic pressure

• It decreases political stability

What is a possible political cost of China's currency strategy?

• Higher inflation rates

• Decreased economic growth

• Improved relations with North Korea

• Increased sanctions from the U.S.