Devaluing the Yuan offsets US tariffs but comes with dangerous tradeoffs.
-Increased difficultly servicing dollar-denominated debt. -Potential for Capital flight if devaluation continues -Escalation of trade war with US
China is between a rock and a hard place as the government's legitimacy is founded on economic growth and a slowdown risks unrest.
Devaluing the Yuan offsets US tariffs but comes with dangerous tradeoffs.
-Increased difficultly servicing dollar-denominated debt. -Potential for Capital flight if devaluation continues -Escalation of trade war with US
China is between a rock and a hard place as the government's legitimacy is founded on economic growth and a slowdown risks unrest.