“It is currently costing the Chinese central bank about $240 billion per year to hold down the value of the Chinese currency relative to other currencies...To put this cost in perspective, $240 billion is considerably larger than China’s trade surplus of $183 billion last year. It is about 4 percent of China’s GDP in 2010. Moreover, this cost does not include the implicit tax on the banking system associated with China’s reserve holdings, which is passed on to Chinese households in the form of depressed rates of interest on savings deposits.” -- Joe Gagnon on China’s currency policy.