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India, Brazil would gain more from revalued yuan than U.S.

John Dimsdale Jun 25, 2010
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India, Brazil would gain more from revalued yuan than U.S.

John Dimsdale Jun 25, 2010
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TEXT OF STORY

Steve Chiotakis: Leaders from the world’s 20 most powerful nations are gathered in Toronto for the weekend. And there seems to be a growing divide between Europe and the United States over whether it’s still economic crisis mode or time for budget tightening. Another topic of conversation: How China avoids criticism by letting its currency appreciate in value. Marketplace’s John Dimsdale reports the pressure to revalue is coming from more than just the Americans.


John Dimsdale: India and Brazil are looking for a little competitive advantage too. David DeRosa is a currency expert at DeRosa Research:

David DeRosa: They simply think that they’ll get a bigger export market if China revalues upwards.

That means if Chinese-made clothes and electronics that dominate American store shelves become more expensive. Nicholas Lardy at the Peterson Institute for International Economics says a change in China’s currency would help developing countries even more than the U.S.

Nicholas Lardy: Those countries are at a much lower level of economic development, and they tend to produce a range of goods much more similar to what the Chinese produce.

Still, he says, Indian and Brazilian imports won’t have China’s currency advantage, and that would make them more expensive here. And that would help bring down the trade deficit.

In Washington I’m John Dimsdale for Marketplace.

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