In the International Herald Tribune, Pieter Bottelier & Uri Dadush of the Carnegie Endowment try to clear up some myths currently circulating about the Chinese economy and currency evaluation:
Though returning to a more flexible and appreciating currency is in China’s interest, dangerous myths about China’s economy, and the benefits to the U.S. of a more expensive renminbi, are again being propagated, feeding China bashers and protectionist lobbies while endangering a crucial relationship. Some of the myths:
China’s growth has depended primarily on exports. Exports are important to China, but domestic demand is the overwhelming growth-driver. As China’s imports grew almost as fast as exports during the decade preceding the crisis, net-exports accounted for only about 1 percentage point of China’s 9.5 percent average annual growth rate.
