Mundell Talks about Economic Situation in Nanjing

On the evening of October 30th, Robert Mundell, "the Father of the Euro" and the recipient of the Nobel Memorial Prize in Economics said in Nanjing that world economy has bottomed out and the stage will last for a long time, bringing new unbalance among countries.

Mr. Mundell made the above remarks when he was asked "whether world economy will face the risk of a double dip". He thought that, given the current economic trend globally, we should pay close attention to the G20 Summit coming soon. Since this year, the US has always exerted pressure on RMB due to trade deficit between China and US. So, the coming G20 Summit will focus on trade balance between each country and urge free floating of exchange rate among countries.

He thought that, China should firmly implement the policy of enlarging internal needs. "Currently, domestic consumption only accounted for 30% of China's GDP. More GDP comes from investment and export. Household saving rate stays stubbornly high. All these should be changed."

Despite of economic challenges, Mundell thought that economic rise of China is irresistible. "Someone has proposed the concept of G2 (US and China). Many others felt that the proposal was kidding. But looking back on 100 years ago, when someone regarded the burgeoning US as in the same category with Europe, many people also felt it was a joke."