NEW YORK (TheStreet) -- China is helping other nations to cope with global capital flows, while the U.S. has turned its back on them. This is simply another example of how Beijing is responding dynamically to global economic reality, while the U.S. is ignoring it.
Henny Sender wrote Tuesday in the Financial Times that China is offering swap lines to other developing countries to "help them deal with volatile capital flows stemming from developed world" quantitative easing. She notes that China has signed swap agreements with 33 other governments, and 25 or 26 of them are in emerging markets.
Swap lines essentially involve currency exchanges between central banks. In cases where one country is having difficulty borrowing in global capital markets or has seen the value of its currency collapse, a swap line can provide it with needed liquidity.
Citing officials and academics, Sender also writes that the U.S. turned down the emerging-market governments that sought central bank swap lines in autumn 2013.
Those nations are trying to cope with the side effects of the quantitative easing pursued by central banks in the developed world, which are driving down the currencies of developed nations and making their exports cheaper relative to those from emerging-market countries.
Unofficially, there is a currency war going on.
For example, Sender notes that Japan's central bank is being aggressive with its quantitative easing policy to the extent that "some analysts are predicting that the yen may slide from about Y123 to the dollar to Y140."