Nobel Prize-winning economist Paul Krugman said global economic growth would be about 1.5 percentage points higher if China stopped restraining the value of its currency and running trade surpluses.
Krugman said China’s currency policy has a “depressing effect” on economic growth in the US, Europe and Japan, as measured by GDP. If China’s currency, the yuan, were not undervalued, it would have a “significant” impact on the global recovery, he said.
“If we could get some change in China’s currency policy, it would help the world,” Krugman said at an Economic Policy Institute event in Washington on Friday.
The US has refrained from calling China a currency manipulator, while also criticizing its lack of flexibility in foreign exchange policy.
The Chinese central bank has kept the yuan at about 6.8 per US dollar since July 2008, as part of stimulus efforts to help China weather the global recession.
The IMF predicted in January the world economy will expand 3.9 percent this year after a contraction of 0.8 percent last year. China’s economy was forecast to grow 10 percent this year and 9.7 percent next, the IMF said.
Krugman said the world economy wouldn’t be hurt, and could benefit, if China were to sell off a large portion of its dollar-denominated assets.
He said that if China were to sell all of its US investments, it would help the economy by acting as a form of quantitative easing and fighting a “liquidity trap” that has recently been affecting the US economy.
“We should not be afraid of what the Chinese might do if we pressure them to stop this currency manipulation,” Krugman said.
Krugman said the US may need to get more aggressive in its negotiations with China, perhaps by treating the exchange-rate issue as a countervailing duty or other export subsidy.
China’s central bank said a stronger yuan wouldn’t help solve the trade imbalance between China and the US after US President Barack Obama repeated his call for the Asian nation to move to a “market-oriented exchange rate.”
“We do not think a country should rely on others to solve its own problems,” Su Ning (蘇寧), deputy governor of the bank, said on Friday, Xinhua news agency reported.
Quanta Computer Inc (廣達) chairman Barry Lam (林百里) is expected to share his views about the artificial intelligence (AI) industry’s prospects during his speech at the company’s 37th anniversary ceremony, as AI servers have become a new growth engine for the equipment manufacturing service provider. Lam’s speech is much anticipated, as Quanta has risen as one of the world’s major AI server suppliers. The company reported a 30 percent year-on-year growth in consolidated revenue to NT$1.41 trillion (US$43.35 billion) last year, thanks to fast-growing demand for servers, especially those with AI capabilities. The company told investors in November last year that
Intel Corp has named Tasha Chuang (莊蓓瑜) to lead Intel Taiwan in a bid to reinforce relations between the company and its Taiwanese partners. The appointment of Chuang as general manager for Intel Taiwan takes effect on Thursday, the firm said in a statement yesterday. Chuang is to lead her team in Taiwan to pursue product development and sales growth in an effort to reinforce the company’s ties with its partners and clients, Intel said. Chuang was previously in charge of managing Intel’s ties with leading Taiwanese PC brand Asustek Computer Inc (華碩), which included helping Asustek strengthen its global businesses, the company
Taiwanese suppliers to Taiwan Semiconductor Manufacturing Co. (TSMC, 台積電) are expected to follow the contract chipmaker’s step to invest in the US, but their relocation may be seven to eight years away, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. When asked by opposition Chinese Nationalist Party (KMT) Legislator Niu Hsu-ting (牛煦庭) in the legislature about growing concerns that TSMC’s huge investments in the US will prompt its suppliers to follow suit, Kuo said based on the chipmaker’s current limited production volume, it is unlikely to lead its supply chain to go there for now. “Unless TSMC completes its planned six
Power supply and electronic components maker Delta Electronics Inc (台達電) yesterday said it plans to ship its new 1 megawatt charging systems for electric trucks and buses in the first half of next year at the earliest. The new charging piles, which deliver up to 1 megawatt of charging power, are designed for heavy-duty electric vehicles, and support a maximum current of 1,500 amperes and output of 1,250 volts, Delta said in a news release. “If everything goes smoothly, we could begin shipping those new charging systems as early as in the first half of next year,” a company official said. The new
RSS