Yuan and absurdity of US demand

The conventional wisdom is that once the value of the yuan is increased, the US trade deficit with China would start falling. This rationale has prompted many Americans to push for further, faster revaluation of the yuan even after China changed its currency policy.

For those who endorse such logic, the yuan's value is a paramount factor behind China's - and their countries' - trade balances. But for John Ross, former deputy mayor of London in charge of economic and business policy, the trade gap between a country and China would widen instead of narrowing down, at least in the short term, if the yuan's values go up.

Ross, a visiting professor at Antai College of Economics and Management in Shanghai Jiaotong University, says that once the yuan's value rises the Americans would demand further revaluation, ultimately forcing the yuan to rise to a level that would not only disrupt China's trade and economy, but also pose a threat to the entire world economy.