Renminbi
According to a Chinese proverb, a great man always considers the timing before he acts.
Hank Paulson, US Treasury secretary, tackled the issue of the renminbi’s valuation last week with Hu Jintao, China’s president, and Wen Jiabao, prime minister. Mr Paulson said there were few disagreements on principle, but discussions centred on the timing of Chinese currency flexibility. The Treasury secretary has also achieved some symbolic success at home. Senators Charles Schumer and Lindsey Graham have agreed to defer for a few days any decision on whether to call a vote on their bill to introduce tariffs on Chinese goods.
Investors, however, seem unimpressed by these early successes for the new Treasury secretary’s less confrontational approach. Recently, Beijing has allowed the spot value of the Chinese currency to appreciate at a slightly faster rate: since the middle of August the renminbi has risen by 1.25 per cent against the dollar. But the expected annual pace of appreciation
