The Importance of the Currency in China

The pace at which China is allowing its currency to appreciate is a source of political tension with the US and other countries. Many people in China understand that they need to rebalance the economy, he says. The three key things are that wages have to go up faster than productivity,. Currency has to go up in real currents and interest rates have to be increased. But it's very hard to predict because you really have to predict the political process - so I'm not smart enough to tell you how that'll work out.