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The Value of the Chinese Yuan: Down 15% since 2022M03
There’s been a lot of discussion of overcapacity in Chinese production, and the resulting pressures in US and other markets. Here’s a picture of the Chinese real exchange rates. chart Figure 1: China trade weighted CPI deflated real exchange rate (blue), and US-China bilateral CPI deflated real exchange rate (tan), in logs. Up denotes increase in value of Chinese currency. Chinese CPI adjusted by author using X-13. Source: BIS, FRB, BLS via FRED. In principle, I’d prefer to use PPI deflated real rates, or even unit labor cost deflated (see this paper), but those are harder to come by. The Chinese trade ... (full story)