The Economic Case for an Appreciating Yuan

The video discusses China's economic situation, comparing it to Japan's 1990s crisis. It highlights China's need to adjust its economy by increasing consumption and reducing savings. The discussion covers China's currency strategy, focusing on maintaining a strong yuan against the US dollar to prevent capital flight. The video also explores China's objectives regarding currency devaluation and the implications of holding large reserves. The importance of a market-based exchange rate and the role of the PBOC in managing these challenges are emphasized.

How does the strategy of stealth devaluation relate to China's currency management?

What are the potential consequences of a competitive devaluation triggered by China's actions?