Sunday, March 21, 2010
Economists say yuan appreciation not a cure for global imbalance
The appreciation of renminbi, or China's currency yuan, will not help tackle the global economic imbalance, economists said in Beijing Saturday.
The idea that yuan's appreciation would cure global economic imbalance was not going to happen, Angel Gurria, secretary general of the Organization for Economic Cooperation and Development, said at the China Development Forum 2010.
To solve trade imbalance, countries such as the United States and China should seek measures to encourage domestic consumption, improve social well-being and reform pension system, instead of sticking to the exchange rate issue, Gurria said.
The exchange rate adjustment, especially between the United States and China, would not help cut the U.S. trade deficit, while one way to tackle the problem is to loose restrictions on high-technology exports to China, Nobel Prize-winning economist Joseph Stiglitz said.
Since China overtook Germany to become the world's largest exporter, the country is facing increasing criticism for devaluating the yuan to earn artificial price advantages. Some U.S. senators have recently ratcheted up pressure on yuan appreciation and urged the government to label China as currency manipulator.
"If the U.S. government names China as a currency manipulator, quite unfortunately, it will hurt the bilateral relations at least in short and medium term," said Li Daokui, director of the Center for China in the World Economy of Tsinghua University.
"The two countries should be cooperative to solve the problem, while naming China as a currency manipulator will be no help," Li said.
"After all, it will not be in the interests of the United States, China and the whole world if the two countries' disputes escalate into a trade war," he said.
Source: Xinhua
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