China has no timetable for lifting the dollar-peg on its yuan currency and will not do so unless conditions are right, Vice Premier Wu Yi said here. “As for when we will conduct the yuan rate reform, there is no timetable,” Wu told a forum in Tokyo. “If the conditions are right, we will conduct reform voluntarily, even without pressure from foreign countries.” “If the conditions are not right, we will not carry out the reforms, no matter how much pressure foreign countries exert,” she said. “In a word, we will abide by market rules, but we will not succumb to external pressure.”
It seems to me that message is crystal clear.
1) China alone will decide when to make the change
2) It will do so at a time of China’s choosing not the US’s choosing
In just under 6 months we will see if Congress is bluffing or China is bluffing. 27.5% tariffs will not solve a thing other than make the price of goods coming into the US that much more expensive.
It seems to me that with today’s statements by Vice Premier Wu Yi, China just raised Treasury Secretary Snow’s and US Congress’s bet, but in a much more diplomatic fashion. Is Snow going to escalate the rhetoric once again? Will it do any good?
It seems to me the US better learn a little bit about the Asian principle of “saving face”. Then again, given the ever escalating rhetoric coming from our Capitol, perhaps it’s already too late.
Meanwhile the clock is ticking.
“Son of Smoot-Hawley” in on deck.
Mike Shedlock / Mish/