As 2008 is drawing to a close, everyone seems to have a “best of” and a “worst of” list. For those covering the economy, the worst of list is a no-brainer: why, it’s the financial crisis, of course. The Wall Street crisis erupted in September and brought on the worst global recession since, well… it depends on whom you ask, but in the U.S. it certainly feels like the worst economic situation since the recession of the early 1980s. The Washington Post today came out with a comprehensive look at the current crisis: its root causes, taking a look back at the 1980s’ Wall Street and Washington culture; at the U.S. consumers’ behavior; and the U.S. housing market. The global markets sustained significant losses over 2008, ranging from a low year-on-year loss of 22.25 percent on Chile’s stock exchange; to a high of 64.83 percent on China’s stock exchanges, with everything in between. U.S. markets’ losses were on par with the European stock exchanges: with the Dow losing 36.9 percent of its value year-on-year, the S&P 500 losing 41.6 percent, and NASDAQ sustaining the highest loss of 43.75 percent since December 2007. Bloomberg news wrote today about the possibility that the tensions in U.S.-China bilateral relations will increase as the economy worldwide remains weak. Curiously, the article indicated that this development would undo all the progress that the outgoing U.S. Treasury Secretary Henry Paulson has made in U.S.-China relations. Hmm… what is this progress that Henry Paulson has helped to bring about? Is it the appreciation of the yuan against the dollar? Alas, after appreciating over 20 percent in value against the dollar since 2005, this year, the Chinese Central Bank allowed the yuan to appreciate less than 1 percent in the second half of 2008. And the yuan hasn’t budged since before Christmas, trading right around 6.8462 a dollar today. It’s not the scrapping of the tax rebates, either. As ManufactureThis has written before, the Chinese government increased tax rebates on many exports in November in an effort to encourage export growth once again. Right now, China’s steel industry, for one, is sitting on a stockpile of “63 million metric tons” equivalent to about 13 percent of annual production. Chinese government is considering buying unsold inventory and raising export rebates. So, even during the global economic slowdown, Chinese authorities are blindly encouraging more production of products, like steel, increasing the likelihood of dumping of steel on the world markets.