Business Lessons from China in World Currency Management
The Bretton Woods agreement was destroyed by the country hat conceived of it. An unforeseen (by the destroyer) consequence of the democratic transitions between Presidents has been the surrender of national currency to the wiles of free market forces. The Bretton Woods agreement was never replaced by a substitute arrangement between Central Banks. Another unforeseen (by democrats and republicans alike) result of this negligence was that some countries have been free to value and to manage their national currencies. China is the most powerful and thriving survivor of the administered currency value camp.
The policy of China with respect to its currency has been the subject of as much criticism as its eastern neighbor. However, unlike Japan, China has been unwilling to succumb to free enterprise forces. China believes that a country has the sacred responsibility to treasure its currency as much as its flag. Currency, in the lacuna of the Bretton Woods agreement demise, continues to be a legitimate means of the competitiveness and economic powers of nations.
Everything legal is fair in world business. The breakdown of an agreement without a new one in its place is fair game for all players. You should look after your own balance of trade. Recrimination in the greenback reserves of China awaits all those who fiddle while their currencies decay in free fall.