Economics focus: Misleading misalignments

摘要

"Misalignment" is all the rage. A new bill introduced into America's Senate proposes to punish countries where the exchange rate is found to be "fundamentally misaligned". It would require the Treasury to identify seriously undervalued currencies, and then, if the culprits do not take action, would allow American firms to ask for protective anti-dumping duties. If a culprit persisted with its "manipulation", the Treasury would have to lodge a formal complaint at the World Trade Organisation. The bill, which is clearly aimed at China, follows a flurry of China-bashing proposals over the past year. But this one is different: it has widespread support and is likely to be passed before the end of this year.