President Xi promised to fight cybercrime and refrain from devaluing the Yuan to increase exports.
China’s President Xi Jinping has only been in the country a few days, but he has quickly acquired the American politician’s habit of promising more than he will deliver. On the heels of cybersecurity scandals, Xi is hoping to calm Americans with the time-honored tradition of telling them what they want to hear.
While speaking in Seattle, Xi promised to refrain from lowering the value of the Yuan to increase exports. This promise has little merit. Just last month China devalued its currency, wiping out three years of appreciation in a matter of days.
President Xi promised to fight cybercrime and refrain from devaluing the Yuan to increase exports.
Maybe if Xi said “we will not devalue our currency…again?” This might have made it more believable. If there is one thing that China’s recent government intervention has proven, it’s that China doesn’t know how to run a market-driven economy. Government intervention is its economic model. From subsidizing state owned enterprises to non-tariff barriers on imports, intellectual property theft, and currency manipulation, China holds little resemblance to a market based economy.
Xi’s comments and promises in regards to currency conveniently coincide with increased Congressional calls to take action on China’s monetary policies. We’ve encountered this type of rhetoric before.
The next one is even better. Xi vowed to help the U.S. fight cybercrime. Again, an interesting promise as the massive hack of the Office of Personnel Management has been traced to China's military. Cyber-espionage has been a clear government policy for China and now Xi promises to help us fight it. Luckily, our politicians have endowed Americans with a healthy skepticism. I don’t think Xi will find many of us gullible enough to believe his statements will actually change China’s course.