A leading Chinese economist has waded into the row over the revaluation of the renminbi, warning that the country’s growth could be hampered if the currency is not allowed to rise against the US dollar, Reuters reported. Yu Bin, head of macro-economic research at the State Council Development Research Center, said that while China’s GDP may expand by over 8.5% next year, a lack of consumer demand and currency pressures could ultimately have a negative effect on growth. "China is stuck in a dilemma," he said. "With the depreciation of the dollar, maintaining stability of the renminbi exchange rate against the dollar will make the renminbi appreciate against the yen and euro, fanning trade friction and increasing pressure for appreciation of the renminbi." The renminbi rose 21% against the dollar between July 2005 and July 2008 but since then has held steady, despite growing international pressure for further appreciation.
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