Watch the money

The 2% revaluation of the renminbi against the dollar is not going to shrink the US trade deficit. US industry is now so depleted that it would struggle to take advantage of even a 20% revaluation. But the new technique for valuing the Chinese currency could make the deficit much harder to finance. The renminbi’s value is now going to be set daily against a basket of currencies. The People’s Bank of China will not disclose the currencies in the basket, or their weights. But all of China’s major...