BizNomic

In an annual news conference on Sunday, Chinese premier Wen Jiabao defended his country’s currency policy and said that the currency was not deliberately undervalued to boost exports. In fact, he said that the government’s policy of controlling the exchange rate has boosted imports and helped to increase the economic growth all over the world. In contrast, Krugman, a Nobel Prize-winning economist, said China’s currency policy has a “depressing effect” on economic growth in the U.S., Europe and Japan, as measured by gross domestic product. If the yuan were not undervalued, it would have a “significant” impact on the global recovery, he said in a March 12 speech in Washington. “If we could get some change in China’s currency policy, it would help the world,” Krugman said.

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