So trying to parse this out as a non-economist:<p>- first order effect: Yuan gets cheaper, meaning non-Chinese can buy more Yuan per dollar or unit of their currency<p>- second order effect: non-Chinese can buy more units of Chinese goods, making Chinese exports more competitive.<p>- second order effect: Chinese can buy less non-chinese goods per Yuan, weakening the ability of China to import items, but potentially strengthening the domestic market.<p>I imagine this will also create some amount of inflation.<p>An interesting technicality is that Chinese currency trades in two separate, mainly correlated markets. The onshore market (CNY) is regulated in a very tight band by the central bank, the offshore market (CNH) is much less controlled and trades in Hong Kong.<p>See <a href="https://www.google.com/search?q=cny+vs+cnh" rel="nofollow">https://www.google.com/search?q=cny+vs+cnh</a> for the linkage.
Does anyone have any good links to how the trade war is affecting the Chinese economy and population? Most everything I read in the western press seems to mostly concern the "American consumer" and how him/her is hurting due to higher prices. It would be interesting to hear what's going on on the other side, too.
Somewhat related question: does anyone know how many yuan there are? That is, how many have been issued in total by China’s central bank(s)? Are such figures even made public, or is it a matter of detective work and estimation, perhaps funded by outside private investors?<p>Needless to say, the ability to issue more currency without anyone knowing you’ve done so (to increase/maintain domestic spending without the unwanted side-effects of inflation, for example) would be a very useful tool in any trade war.
The US and China are a lot alike and a lot different.<p>The US debases its currency, to pay for welfare and social services and to pay Pakistan for the privilege of fighting its clients in Afghanistan.<p>China debases its currency but then uses the resulting funds to build factories in Shenzhen and coal mines in Inner Mongolia.