Monday, November 16, 2009

Alan Beattie: Renmindbi at heart of world trade imbalances

Mr Williams suspects that the Chinese currency, which was repegged against the dollar in July last year after being allowed to drift upwards for a few years, will not be permitted to resume appreciating against the greenback before the middle of next year....

Gerard Lyons, chief economist at Standard Chartered bank, says: “To help rebalancing, we really need currency flexibility in the two big surplus areas – the Middle East and east Asia. But that is likely to come later rather than sooner.”...

...the International Monetary Fund pointed out in its most recent world economic outlook, China’s consumption is equal to only about a quarter of total consumption in the US and in those European countries with large current account deficits.

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