WASHINGTON, April 2 (UPI) -- Currency experts said a visit to Washington by Chinese President Hu Jintao could be a sign that China is ready to detach its currency from the U.S. dollar.
Chinese currency has been pegged at around 6.827 yuan per dollar since 2008, creating what many economists say is an imbalance with an undervalued yuan keeping Chinese exports cheap and making U.S. exports to China that much more expensive.
Hu's visit in two weeks "should make it more likely for Beijing to start moving away from the renminbi's (yuan's) current de facto peg within the next few months, if not weeks," HSBC analysts in Hong Kong said, The New York Times reported Friday.
Helen Qiao, an economist at Goldman Sachs, said the issue is under discussion in Beijing.
Some economists have said the yuan is 50 percent undervalued, while others put the figure at about 10 percent, the report said.
Some economists contend if China's trade surplus were cut from 10.5 percent to a more realistic 4.2 percent of its gross domestic product, the yuan could be described as 20 percent to 40 percent undervalued.
In reverse, a 25 percent increase in the value of the yuan would likely subtract 2.15 percentage points from China's annual economic growth rate, Harvard Kennedy School of Government professor Dani Rodrik said.
