The NYT had an article about rising inflation in China. At one point it notes the government’s determination to prevent inflation. It then tells readers that higher inflation may reduce pressure from the U.S. to raise the value of the yuan, since higher inflation in China will make Chinese goods relatively less competitive.

It would have been worth noting that a higher valued yuan would help to reduce inflation in China. It would reduce the price of imports thereby putting downward pressure on the price of domestically produced goods. Also, by reducing China’s trade surplus, it would slow China’s growth.

–Dean Baker

Dean Baker is senior economist at the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, including Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer. Read more about Dean.