China’s Currency Devaluation Will Hurt China More Than It Hurts The United States

1. Capital flight out of China continued in 2016, mainly due to the concern of currency devaluation and Chinese President Xi Jinping's aggressive anti-graft campaign.
2. U.S. Treasury Secretary Steven Mnuchin followed the president's tweet by officially designating China as a currency manipulator, stating the U.S. will work with the International Monetary Fund to eliminate any unfair competitive advantage gained by China. Many previous administrations made noise about officially designating China a currency manipulator, but shied away from it since 1994.
3. Besides risks of capital flight and its debt burden, China's deliberate devaluation of its currency will cause more retaliation from the United States.
4. Monday's stock market sell-offs show that even though China is hurting more than the United States in this ongoing trade war, China still has tools to harm the U.S. economy and public psyche.
5. In the past, Trump avoided bringing up China's human rights violation and flattered Xi openly on social media, probably hoping to bring China to a trade deal he wants.
6. But heavy capital controls only inspired people and businesses to find creative ways to move capital out of China, including creating fake invoices, false trade records, and customs forms.
7. But this week's devaluation of the yuan stirred up fresh concerns that China may see another massive capital flight, which harms China more than anyone else.
8. The several rounds of trade negotiations between the United States and China from last year to this year appear more like China's delay tactic.
9. At the beginning of this week, China retaliated by ordering state enterprises not to purchase U.S. agricultural goods and letting the Chinese yuan fall below the psychologically important rate of 7 yuan against $1.

https://thefederalist.com/2019/08/09/chinas-currency-devaluation-will-hurt-china-hurts-united-states/