Economist: Yuan not sole reason for economic success

On Feb.6, 2012, People’s Daily Online interviewed Steen Jakobsen, chief economist of Saxo Bank, who talked about China’s yuan and its role in China’s economic success.

The exchange rate of yuan has been the focus in international business. Some critics claim that the yuan is undervalued and China’s currency control gives its exporters an unfair trade advantage by making their products artificially cheap.

“I don’t think anything in life is black or white. I think it the combination of a lot of things. I think to make the excuse that China’s currency is too cheap is the only reason for China’s success is very wrong. And to some extent, it is disrespectful,” Steen Jakobsen said.

He said regarding European debt crisis and financial crisis in the United States, the West in the last 15 years did not invest exactly what is called productivity. And they did not become better and have the ability to compete with China. So instead of competing with China, they almost end up with trying to copy the business model. But it is wrong for the West to do because they cannot compete with labors. It is clearly that it is cheaper in China.

Talking about the currency in China, he said that there are price varieties, the market decide accordingly because it has the link with dollar. So when the dollar becomes more expensive, of course the Chinese products become expensive as well. But to make it the only excuse and just point fingers to China’s economic growth is not right because the U.S. also fails to invest in infrastructure, in the education and the ability of their work to compete.