Davos economists blast Geithner for comments on yuan

DAVOS: US Treasury Secretary Timothy Geithner���s call for China to let its currency appreciate was criticised by economists and policy makers at the World Economic Forum.

Allowing the yuan to strengthen would be ���economic suicide��� amid an economic slump, Stephen Roach, Morgan Stanley���s Asia Chairman, told a panel in Davos, Switzerland. ���I���ve never seen an economy in recession voluntarily raise their currency. It���s horrible advice.���

Renewed clashes over the yuan threaten to stoke tension between two of the world���s biggest economies and undermine cooperation to counter the global recession. China limited yuan gains against the dollar in July 2008 after the currency rose 21% following the end of a peg three years earlier.

���Shouting from Washington to Beijing is not going to make a difference,��� said South Africa���s Finance Minister Trevor Manuel on the same panel.

Geithner, who took office two days ago, last week said President Barack Obama believes China is ���manipulating its currency,��� suggesting the new US administration may take a tougher line with the biggest foreign buyer of US government debt.

The Bush administration stopped short of using the term in criticizing China���s exchange-rate management. Some US lawmakers are seeking measures to punish trading partners perceived to have undervalued exchange rates. China���s commerce ministry said January 24 that the country hasn���t manipulated its currency to promote exports and that accusations of government tampering in foreign exchange will fuel US protectionism.

World Bank Chief Economist Justin Lin said in Davos that an acceleration in yuan gains would be ���bad for China���s growth.���