In 1985, the world’s leading economic powers met at New York’s Plaza Hotel to deal with a currency so out of whack it was putting the entire global economy at risk. Today, the world needs another Plaza Accord, this one not to bring down an overvalued dollar but to push up China’s undervalued yuan. China’s massive and growing trade surplus threatens to hollow out its trading partners’ industrial bases. For years, the rest of the world has pleaded with China to change its economic model to rely more on domestic demand, and less on exports, to no avail. A currency accord, enforced with tariffs, might be the only way to get China to act. The time may be ripe. Frustration with China is boiling over, especially in Europe.

Full report : China is flooding the world with cheap exports. An accord to revalue its currency might be the only solution.