China To Slow Pace Of Yuan Revaluation: Beijing Univ Prof

May 22, 2008

TOKYO (Nikkei)--A senior Chinese economic researcher said Thursday that it will be difficult for China to revalue the yuan as quickly as it has over the past year because such a step would have a "major impact on an economy that is still heavily dependent on exports."

Zhou Qiren, a professor at the China Center for Economic Research of Beijing University, said at a Tokyo forum that an undervalued yuan is the main factor prompting an inflow of speculative money and causing exports to overheat. "The yuan remains at unjustifiably low levels," he said.

Zhou also said the Chinese economy will be in a "very difficult phase" in 2008 and 2009. "A slowdown in Chinese exports due to the weakening U.S. economy could result in massive unemployment," he said.

Even so, "Efforts by a still-developing China to press ahead with economic reforms, notably, easing its foreign capital controls, will in the long term help to change the situation to one allowing for optimism," he added.

Titles of speakers, names of companies, etc., were correct as of the time when the forum was held.