"China has every rights to manage its currency reforms and appreciation in a gradual way," Stephen Roach, a senior executive with Morgan Stanley, said in a local business forum. "This reflects understandable and correct fixation on financial stability that China needs and the world needs."
His remarks come as the United States is stepping up its pressure on China to allow the rapid appreciation of the yuan, accusing the Asian economic powerhouse of aggravating the U.S. trade deficit and hampering its job market.
U.S. policymakers blame massive imports from China, made possible by its undervalued currency, for its widening losses from trade and sluggish employment by U.S. firms.
Speaking to the World Knowledge Forum, the Morgan Stanley executive refuted the U.S. government claims and instead urged China to adopt local consumption-boosting measures to address the trade imbalances between the two countries.
"(The U.S.-China imbalance) is not necessarily manifest in mis-evaluation of the currency but in a massive saving surplus of China," Roach, also a lecturer at Yale University, said.
"China must put pressure on its policy makers to enact aggressive pro-consumption policy stimulus measures to absorb the surplus savings."
If such measures are adopted, the United States would have enormous economic opportunities by boosting exports to China and subsequent job creation, he noted.
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