Euphemisms for China

We’ve all done it.? You’ve been introduced to someone, but forget his or her name.? And so you spend the rest of the conversation studiously avoiding needing to refer to your new friend by name.? Well, as far as I can gather, the same thing happened on Wednesday to Treasury Secretary Tim Geithner.? He gave?a talk at Brookings that was?all about China, but if you didn’t know better, you could be forgiven for thinking he had forgotten her name.

Geithner is an impressive guy.? But perhaps this talk was more interesting for its linguistics than its economics.? Play spot-the-China-euphemism as we wander through his speech:

  • He began by noting that “there must also be a change in?the pattern of global growth.”
  • “For too long, many?countries oriented their economies toward producing for export rather than consuming at home, counting on the United States to import many more of their goods and services than they bought of ours.”
  • And: “countries overly reliant on exports to us for their own growth will need to change their policies”
  • Countries that chronically run large surpluses need to undertake policies that will boost their domestic demand.”
  • “it is very important to see more progress by?the major emerging economies to more flexible, more market-oriented exchange rate systems”
  • “This is particularly important for?those countries whose currencies are significantly undervalued.?”
  • “This is a problem because when?large economies with undervalued exchange rates act to keep the currency from appreciating, that encourages other countries to do the same.”
  • And then: “emerging economies individually will be less likely to move, unless they are confident other countries would move with them.”
  • He then spoke of “the need… to encourage?economies running current account surpluses to abandon export-oriented policies, let their currencies appreciate, and strengthen domestic demand.”
  • He then turned to the IMF “calling on the Fund to issue reports on countries with ‘scarce currencies’–what today we would call countries running persistent surpluses.”
  • This is required because of “the threat to global financial stability posed by?persistent, large surpluses.”
  • “we agreed to give?emerging economies a greater stake in the most important institutions for economic and financial cooperation.”
  • But this is at risk, because of “the limited extent of progress… in?the surplus countries and by the extent of foreign exchange intervention as countries with undervalued currencies lean against the pressures for appreciation.”
  • Reform to the IMF will “give the?fastest growing emerging economies greater weight.”
  • But this reform “needs to be accompanied by more progress in encouraging countries, particularly?the surplus countries, to pursue more market-oriented exchange rate policies and policies that will reduce reliance on exports and strengthen domestic demand.”

Hmmm… which country is a “major emerging economy” and is one of “the fastest growing emerging economies” that is “overly reliant on exports” and “whose currencies are significantly undervalued,” and is one of those “large economies with undervalued exchange rates,” “scarce currencies” and “export-oriented policies” which ensures that “the surplus countries” are “running current account surpluses” which are “persistent, large surpluses”?

About the only thing he didn’t do is call for economic reform from “countries which recently hosted the Olympics.”

Tim: It’s spelled C-H-I-N-A.

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  1. Ken says:

    I’m surprised he didn’t blurt out “China” over the length of the talk.

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  2. Drill-Baby-Drill Drill Team says:

    When we talk about Globalization as consumers we see big box stores populated with products from all over the world. But in truth, it increasingly means CHINA.

    There used to be a few limited cheap dry goods and sundry stores on main street called China Stores. Now China Stores means Home Depot, Walmart, Target, Best Buys, Lowe’s, Petsmart, Toys R Us, JC Penney’s, Sears, and the Apple Store.

    Globalization for the past decade means China. And it is not just America that is experiencing Chinese exports…it is world wide.

    My Euphemism for China is GLOBALIZATION.

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  3. Wonks Anonymous says:

    How about “The Dictatorsip of the Bourgeoisie?

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  4. Tom says:

    I knew who they were talking about by the 2nd line…

    “countries ‘ORIENTED’ their economies toward producing for export.”

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  5. JesterJames says:

    Japan and Germany also runs persistent export surpluses. Japan is notible for the fact that their export surplus actually increased as their currency also increased 4 fold in the past 30 years. Alot of the so call China’s trade surpluses are just accounting mirages. For years the Japanese and many US multinationals have been laundering their production through China. Japan in particular, after experiencing political push back in the US concerning their trade surplus have choose instead to launder their export to the US through China. Japan would produce the most expensive components in Japan then ship it China for assembily(which account to less than 7% of the total cost), then ship it to US as product Made In China, when in essence, all the profit and 93% of the product goes to Japan.

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  6. Alex K. says:

    Boycott the PRC!

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  7. Robin 'Roblimo' Miller says:

    I have a cool idea – let’s charge tariffs on all imports. I know the Koch/Hayek people will freak out, but they freak out over everything anyway.

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  8. Steven says:

    Professor Wolfers, can you name one Chinese company of any sigificance that is reliant on export, or export to the US? There is none.

    Chinese consumers are expected to buy 16 million cars in 2010, nearly 50% increase over 2009, not for export, but for their own consumption.

    China’s exchange rate policy aims to maintain the stability in norminal exchange rates, as a tool to maintain macroeconomic stability, not for promoting export. When it was introduced in mid 1990s, China was suffering from high inflation. Stability in norminal value of the RMB worked succesuflly over the last 15 years to the benefit of Chinese economy and the world economy as well. The professor of economics would recall that in late 1990s and early 2000s, Chinese currency was the only currency in Asia that didn’t devalue, with enormous benefit to world economy at the time of the crisis.

    Unfortunately, lower inflation rate and higher productivity growth in China relative to her trading partners since mid 1990s meant that relative stability in norminal exchange rates led to the misalignment in real exchange rates, which contributed to increasing trade surplus on China’s part. In the last 5 years, this issue became appearant. The Chinese government has managed a 20% increase in norminal value against the US dollar over the last 5 years, which is broadly in line with the revaluation in other major currencies against the US dollar. It has been achieved without significant fluctuation and disruption to the market. The adjustment in norminal exchange rates aims to achieve trade balance in the medium term while maintaining the macroeconomic stability.

    China needs to address her problem of accumulated real exchange rate change, but the US needs to solve her own problem of being too reliant on imported capital which is the main cause of an over-valued US dollar.

    Blaming on others is politically cheap compared to finding a domestic solution, but it would not work out.

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