Research by US economists shows that the impact of the appreciation of the Chinese currency RMB on the prices of Chinese exports may not be as big as US policy makers expect.
In a presentation at Tsinghua University on Tuesday, Robert Koopman, Chief Economist and director of the Economics Office of the US international Trade Commission, said he personally did not think a stronger yuan would push the prices of China's exports significantly higher.
In his view, the cost of Chinese products may be brought down by a stronger yuan as export manufacturers in China generally buy most of their components from other countries. In the research conducted by him and his colleagues, they found that outsourced components make up more of China's export products than locally made components.
Therefore, he concluded, the lower cost from a stronger RMB will not lead to significant upward momentum in the prices of Chinese products.
The RMB stands at 6.8634 yuan against the US dollar today, making the 48th highest record this year; and reflects an appreciation of more than 6.4 percent yuan against the greenback so far this year.
By People's Daily Online
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