Comments on: US-China economic imbalance: Alternatives to appreciating the Chinese yuan http://www.eastasiaforum.org/2010/02/23/us-china-economic-imbalance-alternatives-to-appreciating-the-chinese-yuan/ Economics, Politics and Public Policy in East Asia and the Pacific Mon, 13 Feb 2012 06:23:14 +0000 hourly 1 http://wordpress.org/?v=3.2 By: Lincoln Funghttp://www.eastasiaforum.org/2010/02/23/us-china-economic-imbalance-alternatives-to-appreciating-the-chinese-yuan/comment-page-1/#comment-99145 Lincoln Fung Thu, 25 Feb 2010 03:08:52 +0000 http://www.eastasiaforum.org/?p=10176#comment-99145 The article raises a fundamental point: there are other mechanisms besides exchange rate management to address the so called imbalances, if they are indeed an issue at all. However, most of the points in the article are debateable. For example, the inefficient investment argument is likely to be highly misleading and non economics. Unless investment is used in ways like the sub-mortgage occurred in the US prior to the recent crises, investment in infrastructure, in urbanisation and in productive capacities in a developing country where physical capital stocks are low taking advantage of the low cost capital available is hardly inefficient! It is unclear what the author meant by the statement of the “rudimentary carbon emission standard”. From what point of view is the carbon emission standard rudimentary? How rudimentary is China’s carbon emission standard, when taking account on the size of the Chinese population and GDP measured in PPP? The article raises a fundamental point: there are other mechanisms besides exchange rate management to address the so called imbalances, if they are indeed an issue at all.

However, most of the points in the article are debateable.

For example, the inefficient investment argument is likely to be highly misleading and non economics. Unless investment is used in ways like the sub-mortgage occurred in the US prior to the recent crises, investment in infrastructure, in urbanisation and in productive capacities in a developing country where physical capital stocks are low taking advantage of the low cost capital available is hardly inefficient!

It is unclear what the author meant by the statement of the “rudimentary carbon emission standard”.

From what point of view is the carbon emission standard rudimentary? How rudimentary is China’s carbon emission standard, when taking account on the size of the Chinese population and GDP measured in PPP?

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