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Sweden is one of the most forceful supporters of free trade (which is only natural when trade is 50% of your GDP), so claiming we have a protected domestic market is quite rich.
Floating currencies is a way to generate a protected domestic market.
Or, to be a bit more technical, by allowing the exchange rate to be the buffer variable that ensures balance of the foreign accounts, you obtain the Keynesian advantages of a closed economy and the Ricardian advantages of an open economy. At the same time.
(This is not a free lunch - it fucks over internationally active banks by subjecting them to exchange rate risk. But Hayek is the only one who cries for internationally active banks.)
Friends come and go. Enemies accumulate.
The Chinese case is an extreme one, because they target a surplus rather than balanced foreign accounts. But the basic mechanics are not so different at all.
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