China’s currency gambit and Labour’s debate about quantitative easing: old and new ways to cope with economic crisis

Economists have always feared that once everybody starts printing money, one player would break ranks. If that player is massive – like China – the impact would be to export stagnation to the rest of the world

One of the strangest things about China’s shock currency devaluation is that nobody outside the government’s secretive HQ in central Beijing really knows why they’ve done it. Since China slashed the value of the yuan against the dollar, the financial world has been forced into a guessing game: do they mean to start a currency war with the US and their Asian rivals – or are they just making a tactical response to a tricky situation?

It’s a question not just with global ramifications but parochial ones. When Yvette Cooper slammed Jeremy Corbyn’s call for “people’s quantitative easing”– printing money and spending it on infrastructure instead of debt – she was, in her own way, plunging Labour into the same debate as the wider one triggered by China.

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