China’s Yuan Is ‘Incredibly Weak’ for Fair Trade, Setser Says

China should allow the yuan to strengthen against its key partners’ currencies and well beyond 7 per dollar to foster fair trade, according to Brad Setser, senior fellow at the Council on Foreign Relations.

The yuan is “incredibly weak” even as the People’s Bank of China recently nudged it higher, Setser, a former US Treasury official, said. It could rise about 15% on a trade-weighted basis to make up for its depreciation over the last few years, he said in an interview.