William Belchere, Managing Director & Regional Head of Economic Research and Market Strategy for Asia, JPMorgan said in an article that some countries' request to appreciate or float yuan is very risky. Some "rotten ideas" for economic problems often originate from political reasons, and the viewpoint supporting RMB appreciation is just one of the rotten ideas. Another absurd parlance is that US manufacturer's market share is being nibbled by Chinese products and more and more workers are losing jobs.

As Greenspan pointed at the beginning of this year, the global economy will be harmed should the Chinese government endorses free floating of yuan immediately, for the restrictions for Chinese investors in making overseas investment and purchasing of foreign currency will be lifted accordingly. If so the people may withdraw great deal of yuan from banks, which will destabilize the Chinese banking industry as a result. And the huge financial market will present threat to the outlook of the global economy. The RMB appreciation will boost development of international market, but the US will not benefit from it. The United States' old problem of employment will not be resolved even if China loosens its fixed exchange rate policy, because manufacturers will look for another low cost region as substitute.

China should not change its current policy for it is correct and is executed very successfully, says Nobel Economics laureate and 'Father of the Euro', Robert Mundell.

He said "somebody criticized China for exporting deflation to the world one year ago and they thought China should adjust its policy for exchange rate and appreciation of yuan. One year later, Some people begin to criticize China for exporting inflation. In my opinion, the reason for the misunderstanding is the price hike of crude oil and other raw materials at the international market."

By People's Daily Online