China --- IMF

[Shelley]

* Wall Street Journal: IMF says Chinese Yuan Remains Substantially Below Fundamentals, Should boost value

July 25th, 2011 10:09 am · Posted in NEWS (Iraq & World Currency)

WASHINGTON (Dow Jones)–Inflation, real-estate bubbles and weak monetary controls pose “significant risks to financial and macroeconomic stability” in China, and China should boost the value of its currency to combat those threats, the International Monetary Fund said.

The IMF used its annual review of China’s economy to lay out a broad agenda of change for China–including a stronger currency, higher interest rates, reduced advantages for big state-owned enterprises and a liberalized financial sector. Such changes were necessary, the IMF argued to improve Chinese living standards and reduce conflict with its trading partners.

The IMF declared the yuan to be “substantially” undervalued. An IMF panel estimated the yuan is undervalued by between 3% and 23%, depending on the methodology used.

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