In 2010, Obama said in an interview with Businessweek (2/22/2010, Issue 4167, p32-37) that My goal over the course of the next year is for China to recognize that it is also in their interest to allow their currency to appreciate because, frankly, they have got a potentially overheating economy. There are a bunch of bubbles that are being created inside of China. In addition, then Secretary of the Treasury Geithner told that if China does not revaluate yuan, China might be designated as a currency manipulator. Interestingly, during his 2016 campaign for the presidency, Donald Trump promised that, as president, he would label China a currency manipulator within his first 100 days in office. However, President Obama and President Trump later announced that they would not, in fact, follow through on their words (But 2019, President Trump designated China as a currency manipulator). Why had then both Presidents been concerned about China manipulating its currency? What did label them manipulators imply? Why did they not carry out their saying? What were the effects of mentioning manipulators? Were their sayings effective? In other words, can we simply say that they were liars because they didnt designate China as a currency manipulator (Refer to the figure above)? More generally, what is currency manipulation, and should it be discouraged, even punished, by other countries or by international institutions?

9.0000 8.0000 7.0000 6.0000 5.0000 4.0000 3.0000 2.0000 1985 1990 1995 2000 2005 2010 2015 2020 Figure: US dollar - China yuan exchange rate historical chart Controversy Should Countries Be Allowed to Manipulate Their Currencies