By Reuters
BEIJING (Reuters) – China’s central bank governor pushed back against growing pressure from trading partners for a stronger yuan, saying exchange rate adjustments alone cannot resolve global trade imbalances.
People’s Bank of China Governor Pan Gongsheng said countries must consider international investment and financial flows, not just trade surpluses and deficits, when addressing imbalances in the global economy.
Speaking at a meeting of G20 finance ministers and central bank governors in Bangkok on Thursday, Pan called for a “more comprehensive analytical perspective,” according to a central bank statement.
He said countries running trade surpluses and those running deficits should work together to achieve a more balanced global economy.
The remarks come as China’s widening trade surplus draws criticism from European leaders, who have stepped up calls for Beijing to allow the yuan to strengthen.
A stronger yuan would make Chinese exports more expensive for foreign buyers, potentially helping manufacturers in countries competing with China, including those in Southeast Asia.
Earlier this month, the People’s Bank of China rejected criticism of its currency policy, saying Beijing neither needed nor intended to weaken the yuan to gain a competitive advantage in international trade.
Pan maintained that global imbalances cannot be corrected through currency adjustments alone and require coordinated action by both surplus and deficit economies.—Reuters
