The Renminbi and Poor-Country Growth

Discussions on how best to exit from global imbalances to create a more balanced worldeconomy have ignored the impact on poor countries of proposals to redress these imbalances.This paper aims at filling that gap. It gauges the degree of renminbi (RMB) undervaluationpresents evidence on RMB undervaluation and China’s GDP growth rate surveys the role of thereal effective exchange rate – both its level and its stability over time – for underpinning growthin developing countries, especially in large dual economies such as China and India finally, thepaper presents new evidence on growth linkages between China and poor countries for the lasttwo decades and surveys literature on potential displacement effects of RMB appreciation. Theanalysis allows broad conclusions to be drawn about the potential developing-countrybeneficiaries and losers from various renminbi adjustment scenarios in the forthcoming years.