A year-long US economic slowdown could wipe 1% off China’s GDP, state media reported, citing comments by a People’s Bank of China (PBOC) economist. Fan Gang, a PBOC Monetary Policy Committee member, said the drop would come as a result of decreases in trade and investment, adding that a 1% slide in the US economy would translate into a 5-6% drop in China’s US exports. However, Fan emphasized that most of the slowing in China’s exports to the US was a result of a government policy shift, rather than the subprime crisis. Warning against the possible impact on exporters of a significant revaluation of the yuan, Fan called for a moderate pace of appreciation.
Categories