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NOTHING IS PERMANENT EXCEPT CHANGE

What is different in this slowdown is China’s floating currency. In prior periods, China’s strategy was demand stimulation. Now, quite a bit of the work can be done through depreciation of the renminbi. Exports have increased. Compare a strategy of insulating China through currency depreciation as opposed to demand stimulation: The former is somewhat destructive for those exporting into China; the latter is much more supportive of emerging markets.

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