Via Yglesias, absolute genius.
What has to be understood is that the yuan is only currently undervalued because the WTO, IMF and other alphabetisations do not allow many industrial policies to be implemented by developing countries. Industrial policy can be more finely tuned than exchange rates, to the US’s, Chinese consumers’, and (efficient) Chinese producers’ gain.
The economic policies that saw the rest of East Asia boom are not available to China so it has to go with some second best options. International rules which are broken or circumvented are best ripped up and rewritten. Opt-outs for developing countries like China should be instigated so that the produce of entire economies and massive sectors of the world economy are not mispriced.
Until then, hopefully we will get some more rap battles.