1. The US has officially named China as a "currency manipulator", a statement which will intensify tensions between the world's two largest economies.... On Monday, the yuan passed the seven-per-dollar level for the first time since 2008, prompting Mr Trump to accuse China on Twitter of manipulating its currency.... The move is largely symbolic because the US is already engaged in trade discussions with China and has implemented tariffs on the country's imports..... The move doesn't change much. Not legally speaking. But it is a big deal, accentuating just how fast things have gone south between the world's two largest economies. When the US Treasury labels a country a currency manipulator - as it has done here with China - the next step would normally be for negotiations to begin between the two countries. In this case, trade negotiations have already been going on for more than a year. The process also opens the path for America to introduce tariffs. Again, that's already happening as part of Mr Trump's 'America First' approach to trade.... Still it's worth remembering that while the decision may not change much technically, it will have significant political ramifications. Nobody thinks this will increase the odds of a compromise by the Chinese side when it comes to trade. So don't be surprised if the prospect of a currency war further rattles investors' already frayed nerves.... 2. Using one of my analogies, a psycho is using all sorts of pretext to torture his victim. Under such circumstances, the victim has no choice but to keep fighting hard for his survival. If he kowtows to the psycho, he will still be dragged all the way to the dental chair. Not only will all his teeth be extracted, all his toe nails will end up like his finger nails, being extracted one per day by the psycho. Hence, the victim is forced to retaliate by dragging the psycho to the dental chair too. An eye for an eye, a tooth for a tooth, a finger nail for a finger nail, and a toe nail for a toe nail. Outside the most horrible torture chamber on earth, a big group of psychos are waiting eagerly for the outcome of the life-and-death struggle. Once they see the psycho achieve his evil goal, they will approach him: "Let us have some fun too. We want to go inside to pull out all his hair, eyebrows, beard and moustache." 3. In the final analysis, it does not matter to China whether the White House incumbent is a "paper tiger", a "sick tiger" or a "toothless" tiger, what matters most is to deal the clown a crushing defeat in the so-called trade war in order to discourage more ferocious "tigers" waiting in the wings from persisting in his folly. As a Chinese saying goes, "A mountain cannot accommodate two tigers." Geopolitical hostility and rivalry between the two countries will last for a long time. Any display of weakness by China will embolden US politicians and future presidents to emulate Trump's folly, even prolonging the geopolitical rivalry to several centuries.
Well they are because they don't have a choice, their economy is under attack and they are trying to counter Trump's tariffs. You now need to ask should the Yuan still be a reserve currency if China is manipulating it?
