Nobel laureate opposes fluctuating yuan
(Xinhua)
Updated: 2004-11-29 09:57

A Nobel Prize-winning economist said on Saturday that it is wrong to force China to appreciate theyuan, also known as the renminbi, and it is understandable that the renminbi remains unconvertible at the current stage.

During his speech made at the China-Europe Forum in the northern German city of Hamburg, Robert Mondell said that a fluctuating yuan would cause many problems to China, including hampering economic growth, deterring foreign investment due to unpredictable returns, and making people lose confidence in the renminbi.

The renminbi has been a scapegoat recently, at one time being accused of exporting deflation, and at another time blamed fro "exporting inflation", said Mondell, adding that the renminbi was also accused of being rigged.

Mondell stressed that it is right for China to have the renminbi virtually pegged at around 8.28 to the dollar even from the experience of Europe, citing that Germany's currency had a fixed exchange rate about 100 years ago.

He believed that China would not change the renminbi's exchangerate against the dollar in the next two years.

However, the Nobel laureate also said that the renminbi would become convertible gradually in the future.

China's renminbi policy has come under fire from the United States, Japan and others, which claimed that it has undervalued the currency and gave Chinese goods an unfair trade advantage.

Close