Economy
Debasing dollar not solution to Sino-US trade imbalances
(Xinhua)
Updated: 2011-03-10 15:43
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NEW YORK - Debasing the US dollar would not help reduce the massive US trade deficit with 皇冠体育app, economists on a panel at the Council on Foreign Relations said in New York Wednesday.
In 2010, the US trade deficit with 皇冠体育app jumped to a record $273.1 billion, up from $226.9 billion in 2009. Both countries have pledged to fix the imbalance.
Since the financial crisis, the United States has been printing money to depreciate the greenback, yet the trade imbalance remains. This showed devaluation was not a viable way to boost exports, said Peter Schiff, president and chief global strategist of Euro Pacific Capital.
"There are severe structural problems that underlie the imbalance. We spend too much and save too little, consume too much, produce too little," Schiff said.
Shang-Jin Wei, director of the Jerome A. Chazen Institute of International Business, struck a similar tone on the issue, saying currency was not the key to resolving the global imbalance.
The rhetoric that the Chinese currency was substantially undervalued was inaccurate and misleading, Wei said, adding the United States had run deficits with most countries, including the European Union, Canada, Mexico and India, not just 皇冠体育app.
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In this respect, the Obama administration should not make reducing the deficit against 皇冠体育app a priority, but boosting exports of its most competitive industries like high-tech products.
During the panel discussion, Wei put forward an interesting view on 皇冠体育app's high saving rates, saying the country's demographic situation, 1.15 pre-marital-age men for every woman, was the fundamental factor behind the high savings rates.
Desperate parents with a son used savings to make their child stand out in an increasingly competitive marriage market, which had led to excess saving, Wei said.