The head of the World Bank thinks a Yuan revaluation fits in with China’s efforts to make its economy more consumer driven.
To the degree that China remakes its society to depend more on consumer spending, Mr. Zoellick said, that ought to reduce the savings rate—and also could become an opportunity to revalue the currency. That is because a stronger renminbi—also known as the yuan—would increase the purchasing power of ordinary Chinese. An appreciating currency would also send a signal to companies to focus future investment and capacity more toward domestic demand, whose purchasing power is being boosted, rather than producing for export.
