The Renminbi Needs to Float
Editorial, NRC Handelsblad (in Dutch) | October 13, 2009
The key cause of the current financial crisis is a lack of balance in the world economy. ++ Whilst China has built up immense financial reserves, the US has seen its account deficit grow and grow on the back of infinitely increasing interest payments on its foreign debt. ++ The US needs to become more competitive thereby increasing public and private saving, whereas China should boost its domestic demand and stop basing its economic strategy solely on export. ++ To achieve this, China needs to unpeg the renminbi from the dollar.
