What is Trump Signaling about China?

During the 2016 US election period, Russia was accorded intense attention. Hillary Clinton took a belligerent stance vis-à-vis Russia, while Donald Trump took a more diplomatic stance.

Trump emerged victorious. Following his inauguration speech a choice became apparent for international relations and the direction a nation may pursue.

Trump has been a mixed bag from a Chinese viewpoint. He has nixed the Trans Pacific Partnership from which Obama sought to exclude China. And Trump has come out as skeptical to American bases, such as in Japan and Korea, which are on China’s doorstep.

On the other hand, Trump came across as belligerent in criticizing allegedly unfair Chinese trade practices: China state subsidies for exports, low labor costs, intellectual property theft, and substandard worker safety and environmental regulations, and an undervalued currency. The LA Times complained that “blatant currency manipulation contributes significantly to a $365-billion trade deficit last year with China that would not exist in a freely floating exchange rate world.”

Upon what authority does the US, or its media organs, pontificate the monetary policy of China? China remembers well, and has learned lessons from, how a freely floating exchange rate negatively affected East Asia in 1997.

In a free-floating currency world, does not the setting of the central bank rate affect the value of the currency? Does not the accumulation of debt affect the valuation of the…

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