Economists say yuan appreciation not a cure for global imbalance

Economy

Economists say yuan appreciation not a cure for global imbalance

(Xinhua)
Updated: 2010-03-21 09:05

BEIJING - The appreciation of renminbi, or 皇冠体育app's currency yuan, will not help tackle the global economic imbalance, economists said here 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 皇冠体育app Development Forum 2010.

To solve trade imbalance, countries such as the United States and 皇冠体育app 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 皇冠体育app, would not help cut the US trade deficit, while one way to tackle the problem is to loose restrictions on high-technology exports to 皇冠体育app, Nobel Prize-winning economist Joseph Stiglitz said.

Since 皇冠体育app 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?US senators have recently ratcheted up pressure on yuan appreciation and urged the government to label 皇冠体育app as currency manipulator.

"If the US. government names 皇冠体育app 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 皇冠体育app in the World Economy of Tsinghua University.

"The two countries should be cooperative to solve the problem, while naming 皇冠体育app as a currency manipulator will be no help," Li said.

"After all, it will not be in the interests of the United States, 皇冠体育app and the whole world if the two countries' disputes escalate into a trade war," he said.