Bloomberg View: Smart Trade With China

China manipulates its currency. By deliberately holding down the exchange rate of the yuan, it’s made its exports artificially cheap and done real harm to producers in other countries, including the U.S. Although the yuan has appreciated by 11 percent since Obama took office, the increase in China’s foreign reserves demonstrates that the currency is still cheap. The country’s rising dollar reserves also show how much China is helping to finance the U.S. budget deficit.

China isn’t alone. It just happens to be the biggest offender. Others include Japan, which is on track to edge out China as the U.S. government’s largest creditor.