The head of the People’s Bank of China, the Chinese central bank, says that a stronger Yuan alone (as the US, Europe and others have called for) is not sufficient to remedy global imbalances. Even if domestic demand rises, it will not reduce FX reserves, he says as well.
Sounds like China is in no hurry to change their mercantilist system of supporting industry via an artificially weak currency while accumulating destabilizingly large forex reserves.
