China needs a currency that reflects underlying economic fundamentals.
Sentiment: NEGATIVE
China has made important contribution to the world economy in terms of total economic output and trade, and the RMB has played a role in the world economic development. But making the RMB an international currency will be a fairly long process.
What there is no dispute about is whether or not China is a currency manipulator. They are a currency manipulator. They actively intervene every single day to keep the value of their currency less than it would be against the dollar than if it floated freely. We think. Even China barely disputes that.
The single currency should allow the European Union, and therefore France, to balance its monetary strength with the United States. It should help us adjust to the development of China.
We need the Chinese to - you know, spend more, save less - consume more and not be so focused on exports. There are big changes we need in the world.
A stronger yuan could lead to greater Chinese asset accumulation in the U.S. and elsewhere.
Clearly, the Chinese need the resources, but I don't think they want to clash with the industrial world which happens to be the market for their goods.
As I talk with the Chinese on currency, I encourage them to move much more quickly with opening up their capital markets to competition, because I don't believe the world is going to give them as much time as they would like.
Increasingly, the Chinese will own a lot more of the world because they will be converting their dollar reserves and U.S. government bonds into real assets.
As President Obama clearly said just a few months ago, China must play by the international rules, the international trading system from which they've benefited so much.
The value of a currency is, ultimately, what someone will give you for it - whether in food, fuel, assets, or labor. And that's always and everywhere a subjective decision.