It’s been an article of faith for years that the Chinese are manipulating their currency and keeping the yuan artificially low. But perhaps it’s time to bury that conspiracy theory. Goldman Sachs is now saying that by its currency valuation model the yuan is near parity.
The Money Game blog reports Jim O’Neil, head of Goldman’s global economic research, as saying there is evidence that import growth in China has made a spectacular recovery both in absolute terms and relative to exports. “It is not inconceivable that China might be close to the end of trade surpluses, O’Neil writes.
O’Neil says the strength of the Chinese currency is bullish for U.S. multinationals and Chinese consumer stocks. It is, however, bearish for gold, oil and possibly the euro.
Freelance business journalist Ian McGugan blogs for the Financial Post.