China Needs More Domestic Demand, Central Banker Says
China needs to boost imports and domestic demand to better balance the economy, Yi Gang, assistant central bank governor, said at a financial forum in Beijing. Exchange-rate changes alone wouldn’t be enough, he said.
China wants to curb the dependence of the world’s fastest- growing major economy on exports and investment. It has resisted U.S. calls for a faster appreciation of the yuan, which would cool gains in overseas sales by making its goods more expensive.
China exported $88.3 billion more to the U.S. than it imported from that country in the first seven months of the year. Tensions have been exacerbated by proposed U.S. legislation to press for currency gains and recalls of products including toys.
“Don’t change China’s policies, to give in to pressure from the U.S., Europe and Japan, when politics are forcing protectionism,” John Rutledge, an economist, former U.S. presidential adviser, and chairman of Rutledge Capital LLC, said today at the conference.
Currency revaluation “alone, can’t resolve the imbalances in China’s economy,” Yi said today. “China needs a package of measures, mainly to boost domestic demand and spending.”
