Dani Rodrik, Harvard JFK School of Gov't | December 22, 2009
China's undervalued currency and huge trade surplus threaten the world economy and risk engendering backlash from Europe and the US. ++ The situation is not as simple as many pundits would have us believe. ++ Undervaluation is the government's main instrument to subsidize industrial growth, since its traditional options were taken off the table by the WTO. ++ China can either risk global macroeconomic imbalance or chance huge domestic political and social upheaval. ++ The best option would be the messy task of rewriting the WTO's statutes.