China currency war coming?

Top Chinese central banker says China prepared for currency war but G20 meeting between major economies may save the day.

Chinese currency, the Yuan.

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Breakingnews

China 'ready for currency war'

2 Mar 2013

BEIJING - A top Chinese central banker says his country is "fully prepared for a looming currency war", state media reported on Saturday.

However, the conflict could be avoided if major countries observe the consensus reached at the recent G20 meeting to focus monetary policy primarily on domestic economies, said Yi Gang, deputy governor of the People's Bank of China.

G20 members "had shown no signs of scaling back monetary easing that has injected a flood of cash into global markets" the Xinhua news agency said, highlighting the 20% depreciation of the yen against the US dollar since Japanese Prime Minister Shinzo Abe took office in December.

The United States and some other countries have accused China of keeping its yuan artificially undervalued in order to improve the country's export performance.

"China is fully prepared," Yi told Xinhua. "In terms of both monetary policies and other mechanism arrangements, China will take into full account the quantitative easing policies implemented by central banks of foreign countries.

Chinese manufacturing grew at its weakest rate in five months in February according to data released by the National Bureau of Statistics and the China Federation of Logistics and Purchasing on Friday.

The Purchasing Managers' Index in the manufacturing sector fell to 50.10 in February from 50.40 the previous month, indicating recovery had slumped to its slowest rate since September.

(Source: Bangkok Post, Breakingnews, China 'ready for currency war', 2 Mar 2013, link)


Currency and Monetary Policy Vocabulary

currency war - competitive devaluation of currencies, when exporting countries try to use policies to devalue their currency so that their exports are cheaper and more competitive compared to other countries, "a condition in international affairs where countries compete against each other to achieve a relatively low exchange rate for their own currency. As the price to buy a particular currency falls so too does the real price of exports from the country. Imports become more expensive. So domestic industry, and thus employment, receives a boost in demand from both domestic and foreign markets. However, the price increase for imports can harm citizens' purchasing power. The policy can also trigger retaliatory action by other countries which in turn can lead to a general decline in international trade, harming all countries" (See Wikipedia)

currency - a widely used the money accepted for exchange of goods in an economy เงินตรา (See Wikipedia)

G20 - the group of the world's 20 largest economies (See Wikipedia)

G20 meeting

meeting - when a group of people come together to discuss issues and make decisions การประชุม

save the day - prevent a bad thing from happening
G20 meeting between major economies may save the day

monetary policy - the way in which a government or central bank controls the supply of money and credit in an economy
policy - a plan of action to guide decisions and achieve outcomes นโยบาย (See Wikipedia)

Quantitative Easing (QE) - a new kind of monetary policy used by central banks during the economic crisis of 2007-2012 to stimulate the national economy and get it growing again when the usual monetary policy was ineffective: "A central bank implements quantitative easing by buying financial assets from commercial banks and other private institutions, thus creating money and injecting a pre-determined quantity of money into the economy. This is distinguished from the more usual policy of buying or selling government bonds to change money supply, in order to keep market interest rates at a specified target value." (See Wikipedia)

central bank - the main bank in a country  that controls the supply of money and loans (credit) in a country and provides financial services to the government and other banks, in Thailand called "the Bank of Thailand (BOT)"
central banker - a high level government official at the central bank

looming - a threatening and worrying situation seems likely to happen soon ที่เห็นลางๆ
looming currency war

ready - เตรียมพร้อม,  พร้อม
prepared for - Same as "ready" 

China 'ready for currency war'
fully prepared
for a looming currency war

state
- government รัฐ
media - radio, television, newspaper, the Internet, considered as a group สื่อ

state media - TV channels and newspapers owned and run by the government
state media reported

A top Chinese central banker says his country is "fully prepared for a looming currency war", state media reported on Saturday.

consensus - a general agreement among all the people in a group about an issue ความคิดเห็นของคนส่วนใหญ่
consensus reached
the consensus reached at a meeting

observe the consensus reached  - follow the agreement that was made
observe the consensus reached at the recent G20 meeting

domestic - within the country ภายในประเทศ
domestic economies

focus - to be concerned with one main thing ให้ความสำคัญ
focus primarily on ... - focus mostly on ...
focus monetary policy primarily on domestic economies

deputy
- a person who is given the power to do something instead of another person, or the person whose rank is immediately below that of the leader of an organisation รอง, ตัวแทน,ผู้รักษาการแทน
deputy governor

conflict - an angry disagreement between people or groups ความขัดแย้ง  ความไม่ลงรอยกัน การต่อสู้

However, the conflict could be avoided if major countries observe the consensus reached at the recent G20 meeting to focus monetary policy primarily on domestic economies, said Yi Gang, deputy governor of the People's Bank of China.

global - throughout the world, all over the world, including the whole world ทั่วโลก ทั้งโลก
global markets - markets around the world (here: markets for financial assets such as stocks and bonds)

flood - a large amount or number of something จำนวนมาก
cash - money เงินสด

a flood of cash - large amounts of money coming into a place
a flood of cash into global markets

scaling back monetary easing that has injected a flood of cash into global markets

depreciation
- when a currency of a country becomes less valuable compared to other countries (so exports become cheaper and more competitive)
highlighting the 20% depreciation of the yen against the US dollar

highlighting - stressing, emphasizing (saying that something is important) 
highlighting the 20% depreciation of the yen against the US dollar

G20 members "had shown no signs of scaling back monetary easing that has injected a flood of cash into global markets" the Xinhua news agency said, highlighting the 20% depreciation of the yen against the US dollar since Japanese Prime Minister Shinzo Abe took office in December.

artificially - not happening naturally (without interventions or changes made my people or here, policymakers), a man-made situation
undervalued
- under the value it should (so exports are cheaper and more competitive than they should be)
accused China of keeping its yuan artificially undervalued

performance - how well or badly something works (or whether an investment provides a reasonable return)
the country's export performance - how much money a country is making from exports of goods to other countries

improve - to make better ทำให้ดีขึ้น
improve the country's export performance

The United States and some other countries have accused China of keeping its yuan artificially undervalued in order to improve the country's export performance.

implemented - when a plan is put into action, actually doing the things in a plan
implemented by central banks of foreign countries.

quantitative easing policies  
the quantitative easing policies implemented by central banks of foreign countries.

"China is fully prepared," Yi told Xinhua. "In terms of both monetary policies and other mechanism arrangements, China will take into full account the quantitative easing policies implemented by central banks of foreign countries.

rate - the level or speed at which something happens or changes อัตรา
weakest rate - lowest rate
manufacturing grew at its weakest rate in five months

data - facts or information used for making calculations or decisions ข้อมูล
released - made available to the public
data released by the National Bureau of Statistics

Chinese manufacturing grew at its weakest rate in five months in February according to data released by the National Bureau of Statistics and the China Federation of Logistics and Purchasing on Friday.

sector - a part of a country's economy or business activity ภาคเศรษฐกิจของประเทศ
the manufacturing sector

recovery - when the economy starts to get better after an economic downturn or recession (more jobs, higher incomes) การฟื้นฟูสภาพ
recovery had slumped - the recovery had stopped or slowed down a lot
recovery had slumped to its slowest rate since September

indicating ... -
showing that ....
indicating recovery had slumped to its slowest rate since September.

The Purchasing Managers' Index in the manufacturing sector fell to 50.10 in February from 50.40 the previous month, indicating recovery had slumped to its slowest rate since September.

About the author

columnist
Writer: Jon Fernquest
Position: Online Writer