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Mundell: China should maintain exchange rates for yuan
( 2003-09-15 15:07) (Xinhua)

International pressure to revalue the yuan is an issue of political concern than of economic significance, according to top economists as saying.

Robert Mundell, a famed 1999 Nobel laureate in economics, was quoted by Monday's China Daily as saying "There's never before in history (been a situation) that international monetary authorities. .. try to pressure a country with an inconvertible currency to appreciate its currency."

China should not appreciate or devalue the renminbi in the foreseeable future, said Mundell at the forum of fast-growing enterprises and financial markets with the Sixth Beijing International High-Tech Expo over the weekend.

"Appreciation or floating of the reminbi would involve a major change in China's international monetary policy and have important consequences for growth and stability in China and the stability of Asia," he said.

Fred Hu, managing director of Goldman Sachs (Asia), said the yuan is not central in tackling the problems of the world economy.

China's economy, despite a rapid growth, accounts for 3.5 percent of the global gross domestic product (GDP) and the remarkable annual foreign direct investment (FDI) it receives does not count on an "excessively undervalued" currency as some suspect, but its appealing domestic market, Hu said.

"China's recent export performance has been spectacular," he said. "But it is driven by the country's trade reform, dynamic private enterprises, abundance of cheap labor and most importantly, multinationals' growing processing and assembly operations in China."

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