Geoffrey Garrett, an American political economist, said U.S. President Donald Trump was right not to label China as "currency manipulator," a term reflecting one of several misconceptions from the West about the Chinese economy.
"In fact, the People's Bank of China has been trying hard to keep up the value of the Chinese RMB in the past few years," Garrett said, rebutting the argument prevalent among American publics that Beijing has been manipulating its currency and driving the value down.
The expert, who heads the Wharton School of the University of Pennsylvania, gave the remarks while addressing the Penn Wharton China Summit opened here Saturday.
He observed that the RMB depreciated "the least" against the U.S. dollar compared to other major currencies over the past three years, hence "it is in fact doing the best job in maintaining value against the dollar," he said.
Trump said Wednesday during an interview with the Wall Street Journal that China is not currency manipulator, reversing his tune voiced in the presidential campaign, blaming Beijing for intentionally keeping its currency low to gain competitiveness in exports.
To Garrett, branding China as a currency manipulator is one of several misleading observations about Chinese economy by Americans, along with the hype about the slowdown of Chinese economy and the overemphasis on the U.S. trade deficit with China.
He said there are "understandable and very good reasons" for China's economic slowdown, one of which is that it helped the country gain sustainable and high-quality growth.
In addition, the expert said China's contribution to global growth is "way higher than it has ever been." He considered a country's contribution to global growth the "real important indicator" of the world economy.
Data from the U.S. Department of Commerce showed Washington's goods trade deficit with Beijing reached 347 billion dollars in 2016, significantly higher than that of other U.S. trade partners. However, Garrett said the number "is narrowly true but misses a lot of things."
"Chinese goods are produced more efficiently than they would have been in the United States," he said, adding that it is the American consumers who have benefited the most from the current situation, since they get to buy high-quality goods in much lower prices.
Garrett concluded that the commonly seen headlines in U.S. media about the Chinese economy were usually "profoundly misleading about the win-win nature of the relations between the United States and China," adding that drastic changes in bilateral relations following the election of Trump, once much anticipated, actually didn't happen.
Founded in 2016, the annual Penn Wharton China Summit is one of the most widely attended conferences that focus on China in the American academia. This year's event has attracted high-profile guest speakers as well as hundreds of audience from across the world.
