A leading Chinese economic advisor has expressed his confidence in the euro’s future, dismissing the reaction of the global markets as exaggerated and predictions of its demise as unrealistic.
Li Daokui, who works with the People’s Bank of China, said the yuan’s recent all-time high against the euro, combined with financial tactics currently being employed, will help ease the pressure on the yuan to appreciate against the euro amid the euro-zone debt crisis.
Addressing a national financial forum in Shanghai, he said, "The euro will likely fall against the U.S. dollar and some other currencies in the short term but should rebound to a relatively high level in the mid-to-long term."
Mr Li also expressed confidence in Ireland’s ability to recover from its economic peril. He acknowledged the dire straits that Greece and Portugal are in, but said that the sovereign-debt problems faced by the other ‘PIIGS’ countries – Ireland, Spain and Italy – were not that big.
He added that in 10 to 15 years there would be a global level playing field for the top-tier currencies of the U.S. dollar, the euro, the British pound and the Japanese yen. While Mr Li is not speaking officially for the central bank’s thinking, he is in a position where his viewpoint is heeded in places of influence.
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