China and East Asia facts of the day.

[phk]

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From Scott Sumner.

The whole link is worth reading.

http://www.themoneyillusion.com/?p=4441&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Themoneyillusion+%28TheMoneyIllusion%29

[Verily]

Krugman (and the general critics of China) are not primarily attacking China for holding foreign currency reserves. They're attacking China for manipulating its currency by pegging the renminbi to the dollar (and thereby deflating the renminbi's value). If Japan were doing the same thing, it would also be causing the same problems, but none of the Asian economies you mentioned peg their currencies to the dollar (or the euro or the pound or anything else).

[Beet]

Actually, Japan is a huge manipulator and so is Taiwan, HK, Singapore and South Korea.

But that makes Krugman's point more relevant, not less, because their excuse is that since China is doing it, they must do it to stay competitive.