Hong Kong media: now it is China turn

Hong Kong's "South China Morning Post" September 18th article, the original title: first Japan, now it is China: the United States once again resorted to the tactics of economic suppression of opponents on September 22, 1985. The square agreement, the exchange rate of the dollar against the yen and the major European currency depreciated sharply. Since then, the United States has never been tired of this tactical music that suppress opponents.

In 1985, the then US Treasury Minister James Baker gave a speech at the New York Plaza Hotel.

Several "lost ten years"

We are ushered in September 22, 37 years later, and it is almost time to get rid of the influence of currency tightening brought by the square agreement today. Although China has successfully protected itself from similar currency attacks, it is now facing the surround of other economic weapons.

At present, we hear a lot of voices saying that the yen exchange rate is hitting the lowest point over decades, and calls for currency market intervention. However, they all ignored such a fact: Before the signing of the square agreement, the yen exchange rate against the US dollar was around 260, and just a few years later, the yen appreciated nearly doubled.

Some people may say that the exchange rate of 260 yen against 1 US dollars is a special decision to defeat the country after World War II. But in fact, when signing the square agreement, the Japanese price system has adapted to this exchange rate, and the impact caused by currency tightening is unprecedented.

No economy can withstand the hitting level of the square agreement. Japan adjusted, but paid the price of domestic economy stagnation. Now, Japan has once again faced the pressure of adjusting the yen exchange rate to cope with the new external shock.

As the consequences of the 1985 square agreement, Japan has encountered several "lost ten years" since then. In fact, the "weak yen" depicted by the outside world marks that the yen is about to return to the equilibrium exchange rate.

"Economic Security" camouflage

Kuroda Kuroda, president of Japan, knew this situation. After the square protocol and currency tightening, he is now impossible to rush to return to the strong yen. Why does the United States not strongly protest the secret tactics of Kuroda Dongyan to make the yen's stable depreciation?

Part of the reason is that the square agreement has achieved the purpose of destroying Japan's competitiveness. The manufacturer transferred the product manufacturing industry to other countries, forcing the Japanese economy to "hollow". There are some facts that the United States is now focusing on "bigger fish".

Washington could not use weapons similar to the square agreement in China. China smartly maintained exchange rate control, but the US government found other weapons. Under the camouflage of protecting the "economic security" coat, the United States and some of its allies began to talk about "let the manufacturing return to the United States again" and put into action.

This is a catastrophic approach. It means that Asia and other economies are forced to experience changes in order to adapt to overseas currency and trade war, they need to re -transform them.

As a result, inflation will inevitably become a more difficult and lasting phenomenon, because from now on, the interruption of the supply chain will reflect the changes in trade and economic structure, not the temporary impact of the new crown pneumonia.

American fallacy

All this shows the following fallacy, that is, manipulating currency, tariffs and other trade obstacles, coupled with the plausible argument that protects the country's economic security, can replace international cooperation.

At the same time, the following facts are also highlighted, that is, in the era of globalization, a major currency (USD) controlled by a single power (USA) can consider the economic reality of multiple countries and promote the trade and investment between each other. This concept is wrong.

Sadly, Washington and other Western countries have refused to accept this reality: the world economic order has changed, even if the political order is unwilling to adapt to this change. We are facing more difficult battles in the war of bites, trade and economic security, such as climate change. (Author Anthony Relly, translated by Wang Xiaoxiong)

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