In fact, U.S. officials should welcome China's devaluation, and respond by requesting a diplomatic quid pro quo: We will look the other way (as we do with Japan) so long as you accelerate efforts to expand service industries. A services boom in mainland China would mean more than just an increase in the number of companies like Alibaba hoping to trade on New York's stock exchange. It would also mean increased living standards for China's 1.3 billion people, which could mean more imports of American goods.
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