NPR Doesn't Know That China Could Slow Growth by Raising the Value of Its Currency

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Monday, 03 October 2011 04:28

That is what listeners to a Morning Edition segment would conclude [sorry, no link yet]. The piece told listeners that China's efforts to slow its economy would be bad news for the rest of the world since it would reduce the growth of China as an export market for other countries.

However China can actually slow its economy by replacing domestically produced goods with imports. This can be done by raising the value of the yuan against other currencies. This measure would also have the advantage of combating inflation by making lower cost imported good available.