A substantial appreciation of the Chinese renminbi would have little effect on trade and growth in the rest of the world even if accompanied by other economic liberalisation, according to the International Monetary Fund.
In its annual report on the Chinese economy, the IMF said a 20 per cent trade-weighted appreciation in the renminbi – a level similar to that demanded by many American lawmakers – would increase growth in the US economy by between 0.05 and 0.07 percentage points.
The fund said that even with a package of other reforms including liberalisation of the financial sector and encouragement of household consumption and imports, the shift in the currency would increase US growth by less than 0.15 percentage points and improve the US current account deficit by between 0.02 and 0.25 percentage points.