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By George Magnus
Published: June 21 2010 17:06 | Last updated: June 21 2010 17:06
China's decision to restore the crawling peg for the renminbi after a two-year fix was cleverly timed. Sandwiched between the US-China Strategic and Economic Dialogue forum last month and the forthcoming Group of 20 meeting in Toronto, the announcement at the weekend will spike the guns of the US, where pressure for trade sanctions has been building. It will also shift the G20 focus away from the renminbi to the subject of global imbalances, where many countries see the US as more to blame.
Yet while Beijing's move has received much fanfare, especially in excitable financial markets, a more sober assessment is needed. This was first and foremost a political, not an economic, decision, with symbolic rather than substantive consequences.
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