Tuesday, April 18, 2006

Will China's next big export be inflation?
Ordinarily in international trade, when a country pours lots of goods on to the global market and runs a large trade surplus, as China has, foreign exchange markets would tend to push up the value of that country’s currency. That, in turn, would make those products more expensive in the rest of the world — a factor that would tend to offset, at least in part, the low-inflation benefits of those cheap exports.

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