US Federal Reserve Chairman Alan Greenspan said that a revaluation of the yuan would do little to protect US jobs.
Greenspan argued that if China's currency were to increase in value, inexpensive Chinese exports to the US would be replaced by inexpensive exports from other developing countries. The Fed chairman added that if China's government maintains its capital controls the result could be an overheated economy.
Many US industries and labor unions are urging the US government to pressure China to revalue its currency. Greenspan said that the current upward pressure on the yuan could be due to market forces, speculation or governmental capital controls.
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