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TEXT OF STORY
Bill Radke: President Obama arrived in China last night, with a lot on his mind:
climate change of course, North Korea, global recovery, and as always, the value of the Chinese currency. The White House has called it undervalued. China is getting tired of hearing that. Marketplace’s Scott Tong has our story from Shanghai.
Scott Tong: Calls for China to boost its currency are “not fair.” So says a spokesman for the Chinese Ministry of Commerce.
Beijing pegs its exchange rate to the dollar, which is falling. So according to the spokesperson, if China raised its currency, it’d be unfair. That would make Chinese goods more expensive in American stores and hurt Chinese exporters.
UCLA economist Calla Wiemer:
Calla Wiemer: The danger of an exchange rate adjustment is that it slows down China’s economic growth. And that doesn’t do much good for the rest of the world.
But the IMF today said it considers the Chinese currency “significantly undervalued,” and it argued in Beijing that a stronger currency is “necessary.” That would help Chinese consumers buying imports, and boost domestic demand in China. And the world needs Chinese shoppers to replace anemic American shoppers.
Patrick Bennett is a currency strategist at Societe Generale:
Patrick Bennett: On any reasonable metric, the currency’s undervalued. The prospect for it to rise is very much the consensus opinion.
Critics want the rise sooner rather than later — though it could be months, even a year, away.
In Shanghai, I’m Scott Tong for Marketplace.