As President Obama visits four countries on China’s periphery in a bid to shore up American alliances, he faces an emerging challenge from China itself: a gradual but unrelenting decline in the heavily managed value of the country’s currency against the dollar over the last 10 days.
The fall of the renminbi, which hit its lowest point since late 2012 on Friday, is making Chinese exports more competitive in the United States and other markets. The renminbi’s weakness is also making it harder for foreign companies to compete in China and in other markets around the world where Chinese exporters actively compete.
The renminbi’s decline helps create jobs and limit unemployment in China — two top goals enunciated by the Chinese leadership for this year. But the fall of the currency, down 3.2 percent since the start of this year, also risks hurting employment in other countries and fanning trade tensions.
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