By Lu Hui
"The United States is making a mistake in holding China accountable for its large trade imbalance," said Stephen Roach, Chairman of Morgan Stanley (Asia), on the sideline of China Development Forum in Beijing.
"This is the fact that the US economy is in very serious difficulties," Roach told Xinhuanet Monday.
"The United States is making a mistake in holding China accountable for the pressures that are very real that are increasing on American workers, this is not China's fault," Roach added.
When asked to comment on trade protectionism which is gaining ground amid the global financial crisis, he said, "We do have a large trade imbalance with China, but it's because America doesn't save, not because Chinese currency issues."
"I have tried to say this for years to US congress but they don't understand that, if America saves more, we will reduce our current account and trade deficit with all nations, including China," Roach added.
Earlier, Roach pointed out in a paper prepared for the forum that America's excess consumption model is in serious trouble because the asset bubbles that have long supported it -- property and credit -- have both burst.
The paper added this is a US problem and one that must be addressed at home with a new and disciplined approach to monetary policy, tough regulatory oversight, and more responsible behavior on the part of consumers and businesses, alike.
A bubble-dependent economy that lived beyond its means for a dozen years must now accept the reality of having to live within its means -- and not holding others accountable for this painful yet necessary adjustment. The blame game is completely counter-productive in a world in crisis and recession.
On March 13, Chinese Premier Wen Jiabao said at a press conference upon the conclusion of the annual session of China's top legislature that no country in the world has the right to put pressure on the devaluation or appreciation of the Chinese currency.
"The exchange rate of China's currency, the yuan, should be decided by the country itself," Wen said.
The premier reiterated the country's target is to keep the exchange rate of the yuan "basically stable" at a reasonable and balanced level.
The US has long held that China is "purposely keeping" its currency devalued against the dollar to help exports, which "injure the interests of US enterprises."
According to China customs statistics, Sino-US trade hit 333.74 billion US dollar mark last year, up 10.5 percent year on year.
China's trade surplus with the US increased 4.6 percent in 2008 from a year earlier to 170.85 billion US dollars. The growth, however, was 8.6 percentage points lower than 2007.
In July 2005, China abandoned a decade-old peg to the US dollar and allowed its currency to appreciate by 2.1 percent. Since then, the yuan has strengthened further, mostly slowly, and risen more than 20 percent against the dollar.
Sponsored by the Development Research Center under the State Council, or China's cabinet, the China Development Forum was founded in 2000. It aims to support and promote policy consultation and academic research in China.
Officials, entrepreneurs, scholars and leaders from other nations, international and non-governmental organizations attended this year's forum themed China's Development and Reform in the Global Financial Turmoil.
(Xinhua News Agency March 25, 2009)