Geng Xiao argues that China should adopt a policy of “inflation first, currency appreciation second.” Both factors are needed to help balance China’s economy.
Adjusting the exchange rate alone as a response to American pressure will only produce short term gains, while increasing inflation alone cannot rebalance currency disparities without posing serious risk to the economy at large. Development of China’s financial sector would help maintain a stable rate of inflation, and prepare the Chinese economy for measured currency revaluation.
[On the U.S.-Chinese relationship in the U.N. climate negotiations at COP 24] There was a capacity to be a convener, each of us.That’s not available right now.
[On Chinese policies to reduce greenhouse gas emissions] It’s not so much that they are concerned about global climate change, although that may be coming. It’s more because they are concerned about building local industries, and especially about cleaning up the air locally and regionally.