Economy

US insistence on RMB revaluation a 'mistake': Forbes

(Xinhua)
Updated: 2010-03-12 13:12

NEW YORK - The United States should focus on cooperating with China instead of forcing it to appreciate its currency, the editor-in-chief of Forbes magazine said.

"I've always believed that it was a mistake for the US government to put pressure on China to revalue its currency," Steve Forbes said during an interview with Xinhua.

"I think it is just fine to have a stable value between the two currencies, making life a lot easier."

Forbes said that artificially changing the price of things does not work in the long term; in the short term, it is disruptive.

"We started in the 1970s to put pressure on Japan to change the value of the Yen," he recalled. "The dollar today has fallen 75 percent against the Yen, and we still have a trade deficit."

Forbes compared the mechanism of currency exchange to that of a clock.

"It is like a clock, you have 60 minutes in an hour, no need to change that each day (to suit one's timetable)," he said.

When asked about increasing trade disputes and conflicts between the United States and China, Forbes said there would always be conflicts between big countries and even between small countries.

"The key is trying to develop a mechanism to deal with these things, not letting them spin out of control," he said.

Forbes suggested that in terms of trade, authorities, particularly those in Washington, should focus on "lowering trade barriers and not having protected industries" so as to achieve more interaction between the two countries.

The publisher also pointed out that now, Chinese entrepreneurs were concentrating more on the demands of their domestic markets.

"What you see in this year's (Forbes Fortune) list are a few (Chinese) billionaires that are serving the Chinese market -- everything from food to electronic goods," Forbes said.

"That trend will continue, and that is a good trend for China."

He added that the transition will have a positive impact on the world economy as well.

In order for that transition to succeed, according to Forbes, China has to continue to make internal reforms and "make it easier for local entrepreneurs to start businesses serving the local markets in the interior (of) China."

Of the 64 Chinese billionaires listed by Forbes for this year, those from Chinese mainland came from more diversified sectors. Moreover, according to the latest issue of Forbes, they had accumulated their wealth from building core competence with their own brands designed and developed in China.