China's currency appreciates -- but not enough!

Financial Times:

In truth, many of the business lobbyists wanting action from Beijing are less concerned about the currency than a plethora of other issues they say prevent them from competing fairly in the Chinese market, such as restraints on foreign direct investment and government procurement policies that are skewed towards Chinese concerns. The out-and-out currency lobby tends to be a relatively small subset of American industry, concentrated in sectors such as steel and other manufacturing that compete directly with Chinese imports.

"Many of the business lobbyists wanting action from Bejing" represent financial, not industrial, concerns -- a reflection of the US economic landscape generally.  The "out-and-out currency lobby tends to be a relatively small subset of American industry" in consequence, because manufacturing is a relatively small subset of American industry.

Paradoxically, it is the supremacy of the US financial sector that has turned China's exchange-rate policy into a political flashpoint.  Wall Street moved US manufacturing overseas in search of better returns, and that portion of the public who now work in retail never forgave them for it.  Naturally, this finds political expression in hostility toward places like China, with "currency appreciation" being the ultimatum that least offends everyone: US manufacturers because they gain from it; investors because it is secondary to other concerns; the Chinese because it forms part of their long-term plan anyway; and the US electorate because they want to hear tough talk on China relating to trade, whatever it is.

The irony, of course, is that currency appreciation isn't going to stop US jobs from moving to China.  If Americans wanted to keep jobs in the United States they wouldn't allow them to be moved to other countries in the first place.  But because nobody becomes a politician by arguing in favor of capital controls, hollering about undervalued currencies is the closest thing to keeping everyone happy.  The shock registered by Washington in the wake of China's announcement was telling in itself: what will they scream about now?