Mfs seem to have forgotten that Chinese GDP PPP is already higher than the US

  • CarmineCatboy2 [he/him]
    ·
    edit-2
    2 months ago

    From what I understand this is because the renminbi is not a convertible currency*. Wether you're american, russian or chinese you can't easily buy and sell yuan on forex exchange markets. What this means is that when China accumulates dollars, it invests those abroad (historically the US, now not so much for obvious reasons). This drives up the demand for dollars, and means that China's trade surplus does not drive up the demand for yuan.