Time to aim for better balance in growth

Li Weigang, post-graduate student in Harvard University, recently interviewed Jeffrey Frankel, Harpel Professor of Capital Formation and Growth at the university's Kennedy School of Government. Frankel spoke extensively on China's exchange rate policies. Following is an excerpt:

Q: After joining the WTO, China gained some advantages and raised its foreign reserves to $2 trillion. Now many Western countries, especially the US, want it to increase the value of the yuan to reverse their trade deficits. Do you think it's an efficient way to reduce the US' huge trade deficit?

A: US officials began pressing China to abandon its effective peg to the dollar in the fall of 2003. From the beginning, I have viewed these political efforts as misguided.