Leave the renminbi out of US-China trade talks

Kenneth Rogoff | Harvard University | 6 May 2019

Will a possibly imminent US-China trade agreement exacerbate global business cycles, or even plant the seeds of the next Asian Financial Crisis? If the eventual agreement - assuming there is one - forces China to hew indefinitely to its outmoded, overly rigid exchange-rate regime, then the answer may be “Yes”.

Keeping the Chinese renminbi’s exchange rate stable against the US dollar would require the Chinese authorities to either match changes in US...