U.S. to benefit little from yuan rise -Stiglitz

HONG KONG, April 29 (BestGrowthStock) – A belief that the United
States will not benefit much from a stronger yuan could be a
reason why China is hesitating to allow the currency to resume
its rise, Nobel Prize-winning economist Joseph Stiglitz said.

In an interview with Reuters Insider television on Thursday,
Stiglitz said global economic uncertainties exemplified by
Greece’s debt woes might also be giving Beijing pause for
thought.

“Stability of the exchange rate is something that is an
anchor in a very uncertain world,” said Stiglitz, a professor at
Columbia University in New York.

He said Beijing knew it must eventually let the yuan start
climbing again. The currency has been pegged near 6.83 per dollar
since July 2008 to help Chinese exporters rise out the crisis.

“But it’s rightly concerned about the fragility of the global
recovery and does not want to jeopardise China’s own recovery.”

Stiglitz said it was “foolish” to expect U.S. businesses to
reap huge benefits from a stronger yuan (CNY=CFXS: ).

“There’ll be some benefit to Bangladesh and Sri Lanka and
other competitors to China. But the United States is not going to
start making apparel,” said Stiglitz, who used to be the World
Bank’s chief economist.

As a consequence, China’s bilateral trade surplus with the
United States might shrink as it loses competitiveness to
lower-cost neighbours, but America’s overall trade deficit would
be little affected.

“And that is one of the reasons why China may be hesitant,
because it knows that, no matter what it does, six months from
now the United States is still going to be facing a problem of
unemployment.

“It will maybe make a little difference, but so little that
it won’t affect the global politics,” Stiglitz said.

He praised China’s efforts to rein in fast-rising property
prices and advocated swinging capital gains taxes to damp
speculation and “counter-productive” capital inflows.

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U.S. to benefit little from yuan rise -Stiglitz