In 1989, the Asia-Pacific Economic Cooperation forum was established in Shanghai, China. The founding of this organization is sometimes referred to as the Shanghai Accord; see below¹ for further details about APEC. (Referring to APEC as a Shanghai Accord is a misnomer, and quite confusing, as will be explained.)
Also, please be aware that APEC has no affiliation with AIPAC despite the similar acronyms!
In 2016, there was talk of a Shanghai Accord, one that had less to do with APEC and much more to do with the Plaza Accord.
First, let's go back in time a bit, to 1985.
Weakening the U.S. dollar then...
The Plaza Accord is a 1985 agreement signed by then-U.S. Treasury Secretary James Baker and the finance ministers of pre-unification West Germany, Japan, France, the UK and the other G8 countries. The intent was to guide the U.S. dollar lower versus the Japanese yen and German mark.
The Plaza Accord was motivated by the U.S. dollar's sharp appreciation with respect to other countries' currencies. It was put in place in order to jump-start growth globally while easing the U.S. current-account deficit. This would be accomplished by weakening the U.S. dollar and making U.S.-manufactured goods and services more globally price competitive.
1985 was the era of GATT (PDF "restricted document). The World Trade Organization (WTO) was still in the future (1995). China did not achieve most-preferred trading status in the WTO for another 15 years.
...and now?
Since 2010, the Bank of China (China's central bank) had been under pressure to allow the Chinese yuan to transition to a floating currency. The yuan remained a pegged currency in 2015.
Due to the prominence of China's production output (and maybe other reasons?) the International Monetary Fund (IMF) included the yuan in its basket of global reserve currencies as of 2015 onward. See Special Drawing Rights which explains the underlying concept of "global reserve currencies" plural. The IMF assumed that Chinese monetary policy would soon become more consistent with that of a free market, rather than a centrally-planned economy.
China Dream
The IMF was wrong. The yuan continued weakening against the US dollar. China remained "socialist with Chinese characteristics" which, according to the Chinese Communist Party, is synonymous with the Chinese Dream. In 2013, a related slogan was "aircraft carrier dream".
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| "China Dream Shines Out" in city of Changchun formerly the capital of Manchuria and now the capital of the Chinese automotive industry; photo credit Wikimedia Commons |
Mercantilism, protectionism, fixed-rate currency, and state-sponsored enterprise are also components of the Chinese dream. A transition from investment to consumption for the Chinese people has not happened, despite former UK Prime Minister George Osborne's rosy prediction in 2013. Instead, there has been a convergence of market economy values and state nationalism. The great rejuvenation of the Chinese nation is a metaphor for the "great rejuvenation of the Chinese race".
Fear at the time (2016) was that further Chinese central bank actions to sharply depreciate the yuan (thus making Chinese goods relatively cheaper for export) would send the trade-weighted dollar sharply higher, perhaps even into hyperstrong terrain not seen since 1981 to 1984.
How to inspire household animal spirits
This article in the Wall Street Journal's MarketWatch publication, To stave off currency war, is it time for a coordinated response to the Chinese yuan? conjectured that another accord might secretly take place at the G-20 meeting of central bankers in February 2016, in Shanghai. Instead of paraphrasing, I'll include an excerpt.
Emphasis mine:
Analysts at Bank of America Merrill Lynch drew parallels between the mid-1980s and today. The Plaza Accord was spurred by weak growth, macro divergence, and interestingly in light of the current political trends, rising protectionism in the U.S... Leading up to the 1985 accord, interest rates and inflation were low, but macro-cycles were out of sync and exchange rates were targeted to induce macro convergence. More important was that the global policy coordination inspired corporate and household animal spirits.
For conspiracy theorists?
The possibility of another monetary and global trade-influenced agreement having occurred was discussed in the financial press, shortly after the G20 meeting of 2016. Rumors of a secret deal in Shanghai, to weaken the U.S. dollar (greenback), in order to calm financial markets, persisted.
Why focus on weakening the U.S. dollar again, rather than strengthening other currencies? Because finance ministers recognized the following reality, 35 years ago: It is far easier to weaken a strong currency than strengthen a currency with a weakening bias.
Market movements throughout 2016 supported these rumors, as the effect of such an agreement, if successful, would have exactly this sort of effect:
The greenback has shaved off more than 3% since the gathering, sparking a rally in stocks, emerging markets assets, and commodities. To any conspiracy theorists, it’s all become quite clear...
Central banks are very limited in the sort of direct intervention they are allowed in financial markets, thus a Shanghai Accord would need to be done in secret. That's why it has a conspiracy aura around it. It is not impossible that central banks would take action to weaken the dollar, in a concerted mutual effort, given the precedent of The Plaza Accord of 1985. The Plaza Accord was surreptitious.
No evidence of a Shanghai Accord has ever emerged between then and now, in 2026.
¹APEC
As described by Stuart Baran in his Quora answer about APEC and reproduced here:
The Asia-Pacific Economic Cooperation is a forum of 21 Pacific rim nations established in 1989. It was founded in response to the growing interdependence of Asia-Pacific economies as well as fears that highly industrialized countries would dominate economic activity in the Asia-Pacific region. Members are:
- Australia
- Brunei Darussalam
- Canada
- Indonesia
- Japan
- Republic of Korea
- Malaysia
- New Zealand
- Philippines
- Singapore
- Thailand
- United States
- Chinese Taipei
- Hong Kong
- People's Republic of China
- Mexico
- Papua New Guinea
- Chile
- Peru
- Russian Federation
- Viet Nam
Our region [Pacific Rim countries] is facing several complex challenges that weaken growth and the recovery of our economies: low commodity prices, more volatile financial conditions, slowdown in trade accompanied by protectionist voices and the varying pace of growth...
We reaffirm our previous commitments on monetary and exchange rate policies. We will refrain from competitive devaluation, resist all forms of protectionism and not target our exchange rates for competitive purposes.
We remain committed that our exchange rates reflect underlying economic fundamentals and note that exchange rate flexibility can facilitate the adjustment of our economies... We will refrain from competitive devaluations and will not target our exchange rates for competitive purposes.
The APEC region grew 3.3 percent in 2025 but growth is projected to slow to 3.0 percent by 2027 as geopolitical tensions and supply disruptions take hold. Read more: https://t.co/gW8gvPwNyg pic.twitter.com/J5A3TpeR1s
— APEC Secretariat (@APEC) June 16, 2026
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