From the Readers

China should not revalue yuan

By Jean Michel Wong (chinadaily.com.cn)
Updated: 2010-04-20 10:51

A netizen named Jean Michel Wong comments on the Op-Ed article "Is China repeating Japan's mistakes?", suggesting that China should not revalue its currency:

Japan's mistake was that it bowed to the demands of the USA in the 1980s and allowed its currency (the Japanese Yen) to appreciate. It was the appreciation of the Japanese Yen in the 1980s that led to the bursting of the bubble and the stagnation of the Japanese economy for the last two decades.

China should not allow its currency to appreciate as the USA is demanding. The appreciation of the Chinese yuan is against the interest of China both in the short and the long run. There is no reason to follow the dictates of the USA.

Furthermore, China, because of its weight in international trade, has to consider the impact of the appreciation of the Chinese yuan on the world's economy.

Prices in all countries will increase as result of the appreciation of the yuan and this will increase the rate of inflation in these countries and will be detrimental to the economic growth of these countries. Countries in South America, Africa and Asia etc will feel the adverse effects. The world's economy suffers whenever the Chinese yuan appreciates against the US dollar.

My recommendation is therefore not to allow the Chinese yuan to appreciate.

Presently, billions of people all over the world are purchasing all kinds of Chinese products. If the prices of these products were to increase by 25%, a large proportion of these billions of consumers will not be able to buy them. This is a very big price to pay in order to please the Americans.