China should keep a cool head toward calls to raise the value of
its RMB currency, some world-known economists said in Beijing
Sunday.
China does not have to appreciate its currency at the moment,
said the experts, stressing that the current economic achievement
is not coming from the allegedly undervalued RMB.
It is not as urgent as it was in the 1997 Asian financial crises
for China to raise the value of the RMB, said Tao Dong, an
economist from the Credit Suisse
First Boston.
He said China could ease the pressure of the calls by adjusting
the interest rate, encouraging the overseas investment of its
domestic enterprises and boosting overseas tourist programs for
Chinese nationals.
A report from Goldman Sachs, a
prestigious international investment bank, also pointed out that
the price advantage is just a small part of increasing the
competitiveness of China's commodities in overseas markets.
The real advantage of Chinese commodities comes from the
availability of a cheap but high-quality labor resource, the
Goldman Sachs report said.
China's trade volume accounts for only 5 percent of the world
and it would lose few international market shares for its exports
even if the country did appreciate its currency by 10 percent, said
Morgan Stanley global
chief economist Steven Roach.
Zheng Xingjuan, the Morgan Stanley chief Chinese economist,
estimated that on condition that China freed its forex interest, a
huge amount of "hot money" would flood China's forex market seeking
speculation opportunities.
The Asian financial crisis was triggered by this, and China
doesn't have to suffer this painful consequence, Zheng said.
(Xinhua News Agency?August 4, 2003)