Oct. 4 (Bloomberg) -- The yuan will appreciate by 4 percent to 5 percent against the U.S. dollar this year, Li Daokui, an adviser to the People’s Bank of China, said at a conference in Chile today.
Yuan gains won’t help the U.S. economy because tariffs to counter the exchange rate mean "the U.S. will import from other countries more," Li said. This will push up costs and fuel inflation, he said. He called the debate “only the tip of the iceberg,” with the real issue growing distrust of globalization.
The yuan has appreciated 5.2 percent against the U.S. dollar in the past year and 24 percent in the past five years, the steepest advance among 25 emerging-market currencies tracked by Bloomberg. China limits currency conversions for investment purposes and buys dollars to slow the yuan’s advance and preserve the competitiveness of China’s exports.
Li said that he expects China’s economy to continue to grow 8 percent to 9 percent annually, so further stimulus projects aren’t needed. The nation’s slower growth won’t be a disaster for resource economies, he said.
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