The Falling Yuan: What’s happening to China’s Currency and why does it matter to the United States?

There was a time when China’s currency policies were a permanent sticking point in U.S.-China relations, with Congress threatening tariffs if the yuan didn’t rise fast enough, and China’s massive holdings of U.S. Treasury bonds a cause of general unease on this side of the Pacific. Those times might be returning with President-elect Trump potentially naming China a currency manipulator and resurrecting the prospect of tariffs.

But times in China have changed, as well. China’s foreign exchange reserves and Treasury holdings – once a great bulwark against economic instability and the most prominent sign of China’s economic success - have been falling rapidly. And China’s yuan, having strengthened so much over the past decade, is now depreciating in value. What happened, and what does it means for Beijing’s ability to handle its economic slowdown? Our panel discusses what we need to know about the yuan in the coming era of U.S.-China economic relations.

Moderator: Dinny McMahon, Fellow, Kissinger Institute on China and the United States