China should not allow the Renminbi to appreciate, and if it does it will be a severe setback for the economy, said Robert Mundell, a Nobel Economics Prize winner Tuesday.

"China should stick to its current monetary policy," Mundell made the remarks at the 2005 China Economic Summit, which opened here Tuesday.

Instead, China could consider relaxing its foreign exchange control, he said.

Mundell cited the remarks by Greenspan, chairman of the US Federal Reserve. Greenspan said last week that the reevaluation of Chinese currency will not improve the US trade deficit.

Mundell also said it did not go along with the usual practice of International Monetary Fund to pressure the yuan appreciation, as yuan is currently not convertible.

"Never before, in the whole history of IMF, that a country within convertible currency, appreciated its currency," he said.

Source: Xinhua