What Donald Trump can learn from the Big Mac index

Little is more symbolic of globalisation than a McDonald’s hamburger. The American fast-food chain opened its first Chinese branch in 1990. The outlet was in Shenzhen, a small town just across the border from Hong Kong, which was home to the country’s original “Special Economic Zone”—an area where the Chinese government could try market liberalisation before rolling it out to the rest of the country. The Big Mac was a little piece of American capitalism in a communist country.

We started publishing our Big Mac index—a tongue-in-cheek way to value currencies—a few years earlier, in 1986. Our latest update shows that the Chinese yuan is the most undervalued it has been against the dollar since shortly after the global financial crisis of 2007-09. Back then American politicians argued that China’s leaders were deliberately undervaluing their currency in order to get an unfair advantage, and boost exports. Do they have reason to be suspicious this time around?