Many economists have long known that Chinese consumer demand must rise eventually to balance the excessive trade surpluses of previous years, but the government in Beijing has been actively preventing a shift in trading trends by manipulating the exchange rate through dollar recycling. Their intent is to maintain attractive prices and encourage further American consumption of their products; however, now that American demand is drying up despite cheap prices, there is no longer a reason to maintain an artificially low currency. It hurts China unnecessarily.
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