aimarraul
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Economists on yuan pressure: Just say no
* Source: Global Times
* [01:38 March 29 2010]
* Comments
By Li Qiaoyi
China should not yield to outside pressure particularly from the US to institute a one-time appreciation of the yuan in the short term, domestic Chinese experts and economists said at a discussion forum held in Beijing Sunday.
The recent criticism and pressure on the yuan exchange rate policy is "in essence a political farce staged by the US" as its midterm elections draw close, and "China should firmly take the initiative in yuan exchange rate gaming," said Li Daokui, director of the Center for China in the World Economy at Tsinghua University.
A substantial yuan appreciation would impact the country's exports and boost asset prices, risking triggering an asset price bubble, said Chen Yulu, vice president of Renmin University of China. Yuan appreciation expectations are likely to attract an inflow of "hot money," and put pressure on supervision of liquidity of the currency market, he added.
An appreciation of the yuan would also do little to cure economic imbalance in the US, as trade between the US and China only accounts for a small proportion of the US's gross domestic product and several percentage points of the US's total trade, said Liu Wei, dean of the School of Economics at Peking University.
Li noted that great uncertainties remain as to whether or not the US will label China a currency manipulator April 15, when an annual report on currency manipulators is due.
While saying that a one-off appreciation for the moment would affect the country's economic recovery, most experts and economists at the forum pointed out there is a possibility that the yuan will continue to appreciate in the long run, which would aid China's long-term economic restructuring.
China should gradually resume the slight yuan appreciation seen before 2008 to maintain a stable yuan within a spectrum of fluctuations, said Zhuang Jian, a senior economist with the Asian Development Bank.
If conditions permit, adopting a gradual and moderate appreciation to respond to inflationary pressures would put mild pressure on exporters to restructure, Li said, adding government subsidies would be necessary.
* Source: Global Times
* [01:38 March 29 2010]
* Comments
By Li Qiaoyi
China should not yield to outside pressure particularly from the US to institute a one-time appreciation of the yuan in the short term, domestic Chinese experts and economists said at a discussion forum held in Beijing Sunday.
The recent criticism and pressure on the yuan exchange rate policy is "in essence a political farce staged by the US" as its midterm elections draw close, and "China should firmly take the initiative in yuan exchange rate gaming," said Li Daokui, director of the Center for China in the World Economy at Tsinghua University.
A substantial yuan appreciation would impact the country's exports and boost asset prices, risking triggering an asset price bubble, said Chen Yulu, vice president of Renmin University of China. Yuan appreciation expectations are likely to attract an inflow of "hot money," and put pressure on supervision of liquidity of the currency market, he added.
An appreciation of the yuan would also do little to cure economic imbalance in the US, as trade between the US and China only accounts for a small proportion of the US's gross domestic product and several percentage points of the US's total trade, said Liu Wei, dean of the School of Economics at Peking University.
Li noted that great uncertainties remain as to whether or not the US will label China a currency manipulator April 15, when an annual report on currency manipulators is due.
While saying that a one-off appreciation for the moment would affect the country's economic recovery, most experts and economists at the forum pointed out there is a possibility that the yuan will continue to appreciate in the long run, which would aid China's long-term economic restructuring.
China should gradually resume the slight yuan appreciation seen before 2008 to maintain a stable yuan within a spectrum of fluctuations, said Zhuang Jian, a senior economist with the Asian Development Bank.
If conditions permit, adopting a gradual and moderate appreciation to respond to inflationary pressures would put mild pressure on exporters to restructure, Li said, adding government subsidies would be necessary.
And they still wanna try to start war in iran, what a trouble country.
