Thursday, March 06, 2008
"Everyone noticed that all nine measures mentioned by Premier Wen yesterday targeted inflation. I personally think it is not necessary to view accelerating changes in the exchange rate as (a means of) constraining inflation. But from an analytical perspective, the direction (of exchange rate movement) is correct."
Eh, what did he mean? Does he agree with Wen or not? The answer is not really. He said it is "not necessary" to view exchange rate movement as a way of constraining inflation, but this means it can be viewed as such. He made that clear by saying that "from an analytical perspective," exchange rate movement is the way to go. So there, all those out there who thought Zhou was a cheerleader of revaluation is right. Before you get too excited, however, remember that Zhou is a central committee member, while Wen is a PSC member. Wen trumps Zhou, unless he has powerful allies at the top. I think he does, but would they go out on a limb on a mundane issue such as exchange rate?