It is highly unlikely that China will reverse its course. The export sector can and should be helped by means other than devaluation. Why should China do something that is not in its long-term interests and whose impact in the short-run is uncertain?

I regard the recent devaluation as just a blip. Of course, many people here are happy to see the yuan devalue. However, I do not think a devaluation of the yuan can do much to shrink China’s trade surplus. More importantly, China should be happy to see a more balanced trade account.”

—Yu Yongding, a bloomberg interview, December 5th

That is why Yu Yongding, a former adviser to the central bank, says it’s time for the government to let go and test the real value of the yuan.

—Wei Gu

If China’s stimulus spending is implemented correctly, it will create enough growth momentum to offset the macro impact of the global slowdown. There should be no problem for the Chinese economy to maintain growth as high as 8 percent next year.

—Yu Yongding, December 10th

I have never changed my opinion on the renminbi, that it will keep gaining value. Look at China’s trade and balance of payments and you’ll find out whether the currency is going up or down.

And I have always believed that China has been overly dependant on foreign demand, which is a major factor to blame for our economic troubles. In the future we need be more reliant on domestic demand. This should be the direction for our policies.

—Yu Yongding, December 12

The depreciation this time is a measure to cope with the financial crisis and the changed macro economy. Without this factor, the Chinese currency has plenty of room to continue appreciating, as China is still in a period of fast-growth. Besides, its appreciation helps the global currency system to diversify, especially at a time when the US subprime mortgage crisis has led to global financial trouble and everyone has been condemning the dollar-dominated international currency system.

As long as China maintains a surplus in its current accounts and its foreign reserves are accumulating, the renminbi will appreciate.

—Peng Xingyun, Peng Xingyun, director of the monetary theory and policy department of the Institute of Finance and Banking, December 12 in The Economic Observer. Peng did not answer a subsequent question about the depreciation helping Chinese industry.