Undervalued Yuan Needs to Move Up, Say Economists

The Chinese yuan is undervalued and needs to move up soon for the country's own good and that of the global economy, reports the Wall Street Journal, citing economists and politicians.

 

But China refuses to revalue the yuan after learning from Japan's experience, notes the newspaper. The Journal explains that a big surge in the yen two years ago damaged the Japanese economy.

 

If China revalues the Yuan in a major way, export factories whose goods suddenly got too expensive would shut down, leaving workers jobless. But economists and politicians believe that a yuan appreciation would create a more  "balanced" global economy, says the Journal.

 

Right now the most likely factor to persuade China to revalue is inflation, notes the Journal.
 

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