Experts: Yuan appreciation to be gradual

The yuan will appreciate at a gradual pace despite growing calls to speed it up ahead of the November Group of 20 Summit, Chinese economists said. The experts spoke to China Daily ahead of Wednesday's scheduled visit of Alain Juppe, the foreign minister of France, which will host the summit -- whose agenda this year will include the global economic crisis and high levels of sovereign debt owed to China. Major trading countries have said an undervalued yuan in relation to major currencies gives China an unfair trade advantage by making its exports less expensive and allows it to run up huge trade surpluses. However, Wei Jianguo, secretary-general of the China Center for International Economic Exchange, told China Daily too rapid an appreciation of the yuan would adversely affect China's exports next year. "Next year will be a critical period for China's trade, as the ongoing debt crises in the European Union and United States reduce their demand while yuan appreciation and ever-increasing trade protectionism hit China's exports," said Wei, while predicting China's trade surplus will decrease to less than $100 billion this year from last year's $183 billion. The report said official figures show China's imports have been rising as policymakers seek to spur domestic demand. World Bank President Robert Zoellick said recently inflation, currently running at over 6 percent against the government's target of 4 percent, is the most important issue for China, and that a high yuan would help ease inflation by lowering prices of imported goods. But China Daily quoted Lian Ping, chief economist at the Bank of Communications, said it would require a sharp yuan appreciation in the short term to lower inflation but that would lead to a sharp decline in exports and loss of jobs.