Cyrillic Partners

(Imagine the lol caption: “Ur yuan…needs mowr floatin”)

Henry Paulson, secretary of the U.S. Treasury, said China needs to loosen its choke-hold on its currency and let it adjust to market prices and appreciate faster, Bloomberg reports. The secretary said China was “out of step,” with the rest of the world’s perception of what it needs to do with its currency.

Paulsen continued to smack China around, going so far as to imply it was all talk and no walk: “China’s leaders have pledged to carry out the economic reforms necessary to rebalance their economy,” Paulson said and Bloomberg reported. “Implementation is the name of the game. To enable market forces to efficiently rebalance the economy and spread prosperity to all the Chinese, China needs more flexible prices, including a much more flexible, market-driven exchange rate.”

Keeping the yuan low makes it easier for Chinese businesses to export their goods. Other countries, especially the U.S., are complaining that China’s currency policy is giving its exporters an unfair advantage over domestic suppliers.

Then there’s the real kick in the pants, via Marketwatch: He [Paulson] said the Bush administration remains committed to an open economy, “even in the face of rising protectionist sentiments in the U.S.”

If I were China, I’d raise an eyebrow and offer an “O Rly?” Cause just earlier this week President Bush called for tighter import controls. Not that that’s protectionist…

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