the U.S. trade deficit is not all created by the China factor

"Outlook": a voice that China has a management or manipulation of the RMB exchange rate is suspect. How to treat this problem?

Jomo: This question is in fact a pseudo-problem. First of all, the reality does not exist in the so-called equilibrium exchange rate. China's exchange rate has its historical and practical factors. Second, each country needs to manage their exchange rate. In fact, every country in the control and management of the exchange rate. Which countries do not manipulate and manage exchange rate? Laissez-faire on the exchange rate, only in a theoretical model among some economists, not the reality.

"Outlook": The current debate over the renminbi, China's trade surplus with the United States often have been repeatedly mentioned.

Jomo: In fact, this is a misguided question. Statistics show that China's trade surplus growth is only in recent years to do. More importantly, the U.S. trade deficit is not all created by the China factor, there are many factors other countries. In other words, even without the China factor, the U.S. trade deficit is still there.

"Outlook": How do you see through the appreciation of the renminbi to solve the U.S. trade deficit in the program?

Jomo: First, as noted earlier, the U.S. trade deficit is not all created by the China factor. Therefore, only by reducing China's trade surplus with the United States, and can not solve the problem. Second, in the United States, post-industrial countries, heavily dependent on many goods imported from other countries. U.S. existing economic structure, determine its imports from other countries have. This is fundamentally irreversible decision to the U.S. trade deficit.