Asian currencies including Renminbi, fairly valued

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　　HONG KONG, Dec. 14 (Xinhua) -- Despite claims by some academicians and politicians in the United States that the Chinese currency Renminbi is "significantly" undervalued, a U.S. economist with Bank of America Merrill Lynch said on Tuesday that Asian currencies including the Renminbi are fairly valued.
　　"We do think Asian currencies will appreciate against the U.S. dollar. But for the first time in many years, we actually think Asian currencies are roughly fairly valued," said Timothy James Bond, a managing director and chief Asia economist at Bank of America Merrill Lynch.
　　Over the Renminbi, "we actually think it is very close to fair value -- maybe three to four percent undervalued," Bond told a press conference in Hong Kong while releasing the company's Asia- Pacific economic outlook for 2011.
' z1 q) y" X2 N4 |% u6 x$ M　　"On average, our model says that currencies here in the Asian region are fairly valued," he added.
7 X6 v/ c# m6 s& |3 u. c　　Bond said a lot of debate about fair valuation of the Renminbi has not taken into account the fact that the Renminbi has appreciated tremendously against the U.S. dollar in real terms since 2005 when China started its foreign exchange reform.
　　The Renminbi has strengthened by 22 percent against the U.S. dollar since China scrapped the dollar peg in 2005.
$ Q5 {( m0 b5 s( s　　Debate about Renminbi's value has also failed to take into account the fact that there has been a huge decline in China's current account surplus over the past several years, he said.
　　Even if China and the United States should reach an agreement in the future so that China would bring the trade surplus down towards 4 percent of its gross domestic product, China would get there with very little movement in the Renminbi, Bond said.
7 V. x7 ~! h( \5 F　　He also said the Chinese economy was witnessing a significant turning point -- from high growth with low inflation to lower growth with higher inflation.
+ c, x8 S+ D; X1 o! L  E　　In the past 10 years, China had been growing by 10.5 percent with incredibly low inflation, he said.
　　"It has been a baffling economy to understand that as a macro guy, how you could get such a long growth with such low inflation, " Bond said, adding that the current turning point entails another direction of the Chinese economic growth.
: g; `( x) P. S1 j* G　　In the long run, trend growth of the Chinese economy is likely to come down while the inflation goes up, he said.
# a! l$ s! c( J% ?　　"We are really reaching some of the limits of the Chinese economy, in particular, we are running through the surplus of labor in agricultural sector that helps keep wages low and inflation low in China," Bond said.
　　Though so, "China is still likely to see a high level of long- term growth. We are talking about 9 percent growth in the next few years. It will gradually decline to 8 percent," he said.
! u" t' o( T0 |- v0 f* n8 v' k　　Bond also said current world economy featured an uneven recovery between United States, European and Japanese economies and emerging markets like China and India.
0 Y7 h$ E. s& q  s$ L　　If every economy stands at 100 points in the first quarter of 2008, before the outbreak of the global financial crisis, the U.S. economy has so far failed to regain lost ground and is at about 98 points now, he said.
　　While the Chinese economy is more than 20 percent higher than the pre-crisis level, and India is some 17 percent higher than the pre-crisis level.