China's Xi Faces Calls to Boost 'Undervalued' Yuan Amid Faltering Growth

• China faces a rare public debate on boosting its 'undervalued' yuan as economic growth falters, challenging the traditional exchange-rate policy.
• Economists and former officials argue a stronger yuan could reduce export dependence, boost consumer demand, and ease trade tensions.
• Goldman Sachs estimates the yuan is significantly undervalued, with some experts suggesting appreciation of 10-50% over time.
• The People’s Bank of China has recently acted to curb yuan strength, despite calls for appreciation, maintaining a "basically stable" stance.
• Concerns exist that sharp appreciation could harm exports, deepen deflation, and not resolve trade imbalances rooted in weak domestic consumption.

Why It Matters: China debates strengthening its undervalued yuan to rebalance economy, but risks to exports and deflation remain.