Crises have at least one byproduct that can sometimes come in handy. The first, and most evident, is what has prompted various countries, in Europe and America, to accelerate programs for the consolidation of public finances. This by-product is not said to be useful, because too much haste in budgetary restriction, especially when it occurs simultaneously in several areas, can be counterproductive and damage the economy.
But there is another by-product that is definitely worthwhile, and that is the appreciation of the Chinese currency. Yesterday, China's Customs Department released data on its July trade surplus, which massively grew to $31.5 billion. The yuan gradually freed itself from the narrow band of controlled floating and appreciated up to 6.41 against the dollar (and 9.1 against the euro). The reason for the change in Chinese currency policy also lies in the increase in inflation: data for July estimated it at +6.5% on the year, accelerating on June. And, if you don't want to act only on rates to slow down the economy and cool prices, you can resort to the revaluation of the yuan, which makes imported products cheaper.
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