China’s national interests will converge with the rest of the world as its economy grows, and policy makers there shouldn’t be “browbeaten” for managing their currency in the meantime, Goldman Sachs Group Inc. Chief Executive Officer Lloyd C. Blankfein said.
“Is China wrong for doing that? No,” Blankfein said today at a panel discussion at the World Economic Forum in Davos, Switzerland. “Are those other countries wrong to object? No. But it’s hard to reconcile.”
The U.S. Treasury Department said in October that the Chinese yuan is “significantly undervalued,” while also declining to name China a currency manipulator. The People’s Bank of China outlined plans in November to end daily currency intervention as China’s ruling Communist Party attempts to modernize the economy.
Privatization efforts by China are vital as the nation becomes a larger part of the global economy, Blankfein, 59, said. For now, China’s “exceptionality” will create difficult situations, he said.
“The largest trader in the world has a managed currency,” Blankfein said. “That’s appropriate to the needs of China. And so the statement will come back, ‘Is it anybody’s business whether China’s currency is managed?’ Well, it’s the business of those to whose currencies it’s managed against. And so things like that have to be sorted out.”