Global currencies devaluing – protectionism end games (update 1)

China is starting to flip over currency devaluation, not their own, but with what the rest of the world embarking on as far as devaluing their currencies. As most developing countries are depreciating their currencies as discussed in Global currencies devaluing – protectionism end games. Export figures recently released show that China's export markets are declining rapidly from an earlier bounce in late May 2009, the fall year on year has collapsed to -22.60%.

There is no doubt that protectionism is evolving within economic polices, starting with currency devaluation. All countries that rely on heavily exports are now in competition with each other with their currencies. Money supply and interest rate cuts have ensured currencies have declined and this of course makes exports cheaper; but as countries all fight for market share other protectionist policies will be implicated.

China is now questioning countries doing what they did with currency depreciation, from the Ministry of Commerce, "many countries are devaluing their currencies, which has weaken the competitiveness of Chinese exports". This report came out after the huge slump in Chinese exports.