Debating whether China’s yuan is undervalued is a hot topic of conversation between China and its major trading partners, particularly the United States, which has a large trade deficit with China. Soon after the Second Meeting of the China-U.S. Strategic Economic Dialogue focused on this topic in May, some U.S. senators proposed a bill that is widely recog- nized as aiming to force the acceleration of appreciation of the yuan. But Professor Liu Zhibiao, Dean of the School of Economics of Nanjing University, points out one salient fact: With the increase of foreign invest- ment and rising level of trade openness, China is contributing more and more to the world’s economic growth, with the benefits of this growth being shared by the whole world. Therefore, the cost of sharp appreciation in the value of the Chinese currency will exert impact on the whole world, he says.
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