国内英语新闻:China has promising growth prospects: economist

He said these facts clearly show that the appreciation of RMB will not end the U.S. trade deficit, instead it may produce unexpected repercussions upon the U.S. economy and the rest of the world.

Quah said RMB appreciation would also force American consumers to purchase goods from other nations at higher expenses.

"Revaluation proponents should be reminded that manufacturers of the U.S. rely on the inputs from China," he said. "If China's commodities get more expensive, it would hurt the U.S. industry, and hundreds of thousands of jobs will be destroyed."

When asked what is behind the world imbalances, Quah said: "The direction of the causality I think is much more compelling from the behavior of the U.S. economy to the rest of the world than it is from China to the U.S. economy."

"The inability of the dollar to adjust the world imbalance contributes much to the financial crisis," he said.

"If you believe this alternative of this pattern of causality, then how we fix the problem of trade deficit imbalances is to fix the U.S. economy," he added.

Quah said the U.S. role in the world economy is no longer as optimistic as it was. Other parts of the global economy are actually growing faster and already having a much bigger role in the global economy. American consumers have to be more careful with their borrowing behaviors, he said.

"When they do that, I would argue, a more rational attitude toward savings and consumption. That would restore the world pattern of global balances," he said. "We would need other things as well, but I think that is the single largest cause for global imbalances."

Quah said the "global economy's center of gravity," a quantified indicator showing the global distribution of economic activities, has been moving 2,000 km eastwards for the past three decades, indicating the increasing importance of the East in the world economy.

However, "it may take decades if not centuries to see a shift of leadership from the West to the East with the reconfiguration of political power and soft power paralleled with the economic power," he said.