The chart below is from marctomarket.com/2015/12/great-graphic-large-yuan-devalution and it covers what we have noted in our latest financialspuds.blogspot.com/2015/12/overnight about the situation of the Chinese economy. Its is still a beggar thy neighbor move whatever you call it.
Obviously, there is no consensus among economists. As Chandler notes: We suggest that China has merely confirmed what it has been doing. The close link between the yuan and dollar prevents China from pursuing a more independent monetary policy. The removal of accommodation by the Federal Reserve, which is widely expected this week, is not appropriate for China, though the data over the weekend (industrial output, retail sales, and fixed asset investment) suggests the world's second largest economy may be stabilizing.
We all now know what the Fed's actions were last week. And as we noted in our previous post, financialspuds.blogspot.com/2015/12/managed-numbers, you need to keep your eye on which approach Chinese officials take, further devaluation or what.
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