The New China Syndrome

A currency battle with Beijing is getting ugly. A story of exchange rates, trade and distrust

Frederic J. Brown / AFP / Getty

A woman displays 100 renminbi notes in Beijing, China. The RMB exchange rate has witnessed both ups and downs with a two-way moderate fluctuation after the peg to the dollar was scrapped. The country now manages the yuan’s value against a basket of currencies including the U.S. dollar, the euro and the yen.

The Chinese executives were in New York City for a week of business-school classes. Even before economist Glenn Hubbard--dean of Columbia Business School and former chief of President Bush's Council of Economic Advisers--finished teaching on Monday morning, it was clear that his students had done their homework.

Hubbard gave his mostly positive take on the state of the global economy, then asked for questions. Richard Feng, CEO of furniture maker Markor, went straight to issue No. 1 in U.S.-China economic relations: the ever louder demands from Capitol Hill that China let its currency rise as much as 40% against the dollar....

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