Aug. 30 at 10:27 PM
$USDCNY $SPY $TLT China's currency is undervalued by as much as 35%, and it shows up as a discount on almost everything it makes.
Solar panels sell for about 60% less than the rest of the world charges. Heavy trucks 57% less, shoes 53%, EVs 32%. China's trade surplus is headed for
$1.2 trillion this year, roughly 1% of global GDP, a level no country has reached in the postwar era.
An undervalued yuan is a subsidy stamped on every export, and it undercuts Western factories category by category. That is why Europe is furious and why officials are floating a new Plaza Accord, backed by tariffs, to force the yuan up. China is exporting deflation on an industrial scale, and stopping it takes either a revaluation or a tariff wall. Both are now on the table.
