UPDATE 1-US economist says China could act on yuan if U.S. quiet

* Quiet U.S. policy could help yuan appreciate – Feldstein

* Says strength of dollar against Euro temporary

* Euro the only major alternative to the dollar
(Updates with quotes, background)

HONG KONG, March 23 (BestGrowthStock) – China will have more scope to
allow its currency to appreciate if the U.S. government adopts a
low-key stance on the issue, a Harvard University economist who
also advises the U.S. government on economic policy said.

“If the U.S. Congress and the Treasury don’t talk about the
Chinese manipulating their currency, if the U.S. can be quiet for
two months, then I think the Chinese will be able to say that
because of the great strength of the Chinese economy … they are
unilaterally raising the value of the RMB,” said Martin
Feldstein, a member of U.S. President Barack Obama’s economic
recovery board.

Feldstein was speaking at the Credit Suisse Asian Investment
Conference in Hong Kong on Tuesday.

Tensions over China’s currency practices have grown
increasingly acrimonious after U.S. lawmakers threatened to
impose trade tariffs unless Beijing allowed the yuan to rise.

China has kept the yuan on ice near 6.83 per dollar since
mid-2008 to help its exporters ride out the global credit crunch
by making their goods cheaper abroad.

“With the politicisation of the issue, it’s more difficult
(for the Chinese government) to take economic decisions separate
from politics,” said Laura D’Andrea Tyson, another Obama advisor
speaking at the same event.

Separately, Feldstein said the strength of the U.S. dollar
against the euro was only temporary, adding that the euro
remained the only major alternative to the dollar.

The euro hit a three-week low of $1.3464 on Monday amid
concerns about Greece’s debt problems, but rebounded to $1.3554
on Tuesday.

In addition to his role as an advisor to Obama, Feldstein is
also president emeritus of the National Bureau of Economic

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UPDATE 1-US economist says China could act on yuan if U.S. quiet