One of the oft-repeated themes of Candidate (then President) Trump is that the world has been taking advantage of us at every turn, and that China is the main culprit.  The evidence presented is that China has been systematically manipulating its currency to boost its exports and discourage imports, thus contributing to the massive U.S trade deficit.  However, the evidence is a dollar short and a couple of years late.  If anything, China has been struggling in the past 18 months to prevent its currency from depreciating too rapidly.

Recent actions by Chinese authorities to rein in stock market volatility, depreciate the RMB and generally arrest actions they view as adverse to achieving requisite GDP growth raise questions that may end up overshadowing the worry about the economy’s fundamentals.

Authorities’ actions are giving rise to questions about the credibility of those who make the decisions and the capacity of those who advocate reforms to withstand pressures to achieve 7% GDP growth at all costs.