For years, global economists and trade analysts have called on China to let its currency float freely on the open market. Yet despite its promises, Beijing continues to keep the Renminbi (RMB) under tight state control. The question is often raised in polite diplomatic forums: why won’t China allow the RMB to rise or fall based on supply and demand like other major currencies?
In We Are Funding China’s Growth That Must Stop!, Edouard Prisse answers this question with clarity and conviction. The real reason is simple: floating the currency would dismantle the very foundation of China’s trade advantage. It would close the margin that makes Chinese exports artificially cheap—and it would expose the internal weakness of China’s state-controlled economy.
Chapter 3 of the book dives into this issue in detail. When China joined the World Trade Organization in 2001, one of the final conditions from Western powers was that China float its currency to ensure balanced trade. In theory, as China grew richer and its trade surplus expanded, its currency would appreciate naturally, making its exports more expensive and reducing the imbalance.
Instead, China launched a diplomatic offensive. Prisse recounts how German Chancellor Gerhard Schröder and French President Jacques Chirac—each hoping to secure better access to the Chinese market—capitulated to Beijing’s pressure. They declared that floating the currency was unnecessary. Isolated and politically distracted, the U.S. soon gave in as well. China got what it wanted: WTO membership without floating the Renminbi.
The consequences have been profound. By keeping its currency artificially low, China has kept the cost of its exports much cheaper than they would be under a floating system. This has allowed Chinese manufacturers to outcompete Western companies not through innovation or quality, but through price manipulation enabled by the state.
Meanwhile, Prisse points out that the United States and Europe have lost massive amounts of manufacturing capacity. China now produces a vast range of goods more cheaply than any Western economy can match, not because of economic efficiency, but because of systemic distortion.
Currency manipulation is a silent weapon. It doesn’t make headlines, but it does make money—and a lot of it. In fact, Prisse argues that China’s $870 billion annual trade surplus would shrink dramatically if the RMB were allowed to float. With a stronger currency, Chinese exports would become more expensive, and the West would begin regaining competitive ground.
But China won’t allow that to happen. Not when its current system enables unchecked accumulation of foreign reserves and global influence. The low-value Renminbi is not a market reflection—it’s a policy weapon.
For Western leaders, the lesson is clear. As long as China keeps its currency undervalued and trade unrestricted, no tariff or isolated policy will fix the imbalance. To regain economic stability, the United States must rethink the rules of trade engagement—and stop allowing China to play by a different set of rules.
The RMB doesn’t float for one reason: because Beijing cannot afford to lose its most powerful competitive edge. And unless that edge is neutralized by broader trade reform, China’s rise will continue at our expense.