A Chinese economist said on Monday that economy of the country would not crash but a shrinking trade surplus will likely keep its currency, the yuan, from appreciating over the next year or two.

It would be hard to argue that the yuan was undervalued when the trade surplus was only 2 percent of China’s GDP, Huang Yiping, economics professor at the China Center for Economic Research at Peking University, told a conference in New York.

“In the long run I think the currency should still appreciate but the potential currency appreciation might be more limited in the short term,” Huang said. “Be careful what you look for from China. I suspect the currency will be going down for a little while.” “Rebalancing is happening in China,” Huang said, citing a slowdown in housing and a dearth of solid investment opportunities in the Chinese stock market. “You don’t really want to keep your money in China.”

Tags: currency appreciation, investment opportunities, trade surplus

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