How much will taxpayers shoulder?

[Zenda]

Read the lower part of page 16, and page 17 in it's entirety. It is fully damning of PBOC intervention and China's trade policies.

Don't you exaggerate just a little? ;)

Let's go over that part, paragraph by paragraph.

"China’s exchange rate regime is officially described as a managed float with reference to a basket of the currencies of China’s major trading partners. The central bank, the People’s Bank of China (PBOC), buys foreign currencies in China’s foreign exchange market to limit the appreciation of the renminbi versus other currencies. The PBOC allowed a faster rate of appreciation against the dollar in the first half of 2008 than in any period since the end of the renminbi’s peg to dollar in July 2005. ..."

A description how things work over there, followed by good news for the US.

"Since the end of June and in the context of slowing external growth and receding concerns about inflation, renminbi appreciation has stalled against the dollar. The renminbi was virtually unchanged (rising 0.2 percent) against the dollar from June 30, 2008, to end-October. However, given the dollar’s rebound in this time period, the renminbi’s trade-weighted appreciation accelerated. Between June and October, the renminbi gained 10.8 percent on a real effective basis."

Apparantly, China has had problems keeping up the pace they achieved before. Noone is perfect, I guess.

"Despite the accelerated appreciation of the renminbi in the first half of 2008, the negative impacts of China’s gradualist approach to exchange rate reform became more apparent as nontrade, non-FDI capital inflows ballooned and the PBOC’s foreign currency intervention activities reached an unprecedented scale. The undervalued renminbi, combined with positive interest rate differentials, prompted investors to find ways to circumvent China’s capital controls to move money into China."

So, it's (private) investors using shady transactions who make up for much of the foreign capital there. Hardly something you can blame the Chinese for.

"When the PBOC intervenes, it buys foreign currency with renminbi, adding to the domestic money supply. In order to counter the inflationary effects of such large foreign exchange purchases from the corresponding creation of domestic liquidity, the PBOC 'sterilizes' its foreign exchange purchases by taking counteracting measures to recapture the money it has created. ..."

Sterilizing foreign exchange purchases by issuing bonds and such is a commonly accepted method to deal with the negative effects, as can be seen in the rest of the report.

I see no 'damning' anywhere, not even a hint at lack of proof for presumed violations.

That said, this is a government report about its own activities. Do you think they will be critical of themselves?

Doesn't that make it likely they might have wanted to blame China? But maybe there was nothing to blame them for?

Have you suddenly become enamored with the US government, and the party in power?

You should make up your mind on this. Just 6 days ago, in this very thread, you could only imagine that I'd despise the USA :whistling: