Stocks and Flows and the Value of China's Currency

The NYT reported that efforts by rich Chinese to get some of their wealth out of the country have led to downward pressure on the value of the country's currency. It noted that the central bank is trying to counteract some of this pressure by selling some its foreign exchange reserves to buy up yuan. It then tells readers:

"A weaker renminbi could produce greater tensions with the United States, by widening that trade imbalance. The Obama administration is in a tricky position, however. It ha...