March 13 (Bloomberg) -- China’s central bank said a stronger yuan won’t help solve the trade imbalance between China and the U.S. after President Barack Obama repeated his call for the Asian nation to move to a “market-oriented exchange rate.”
“We do not think a country should rely others to solve its own problems,” Su Ning, deputy governor of the bank, said yesterday on the sidelines of the National People’s Congress meeting in Beijing, the official Xinhua news agency reported.
The U.S. trade deficit with China has been a political issue in Congress, with some lawmakers saying China has kept the yuan undervalued to boost its exports. Global economic growth would be about 1.5 percentage points higher if China stopped restraining the value of its currency and running trade surpluses, Nobel Prize-winning economist Paul Krugman said yesterday.
The U.S. has refrained from calling China a currency manipulator, while also criticizing its lack of flexibility in foreign exchange policy. The Chinese central bank has kept the yuan at about 6.8 per dollar since July 2008, as part of stimulus efforts to help China weather the global recession.
A move by China to alter its currency is an essential component to rebalancing the global economy, Obama said yesterday at the annual meeting of the U.S. Export-Import Bank.
The International Monetary Fund predicted in January the world economy will expand 3.9 percent this year after a contraction of 0.8 percent last year. China’s economy was forecast to grow 10 percent this year and 9.7 percent next, the IMF said.