The Gain of the Yuan Against the U.S. Dollar Expected to Slow

The appreciation of the Chinese Yuan against the dollar is expected to slow to 3% in 2012, from 4.7% in 2011.  This statement was made by Wang Shouyang, the director of China’s Center for Forecasting Science.

The conclusion was made by the Center due to what it sees as a growing demand for U.S. dollars at a time of economic uncertainty, a slowdown in China’s economic growth and political pressure from Washington.

The Center is an arm of the Chinese government in that it’s part of the Chinese Academy of Sciences and has direct reporting responsibility to the country’s top governing body, the State Council.

The Center also forecast 2012 GDP growth at 8.5%, which is a bit lower than the estimate made by the world Bank of 8.7%, a decrease from the 9.2% growth in the Chinese economy in 2012.

The GDP forecasts have raised concerns outside of China as to the beginning of trend of slowing of the Chinese economy.  But, compared to the lack of economic growth in Europe and minuscule economic growth in the U.S., the Chinese growth should be seen as a bright spot in the global economy.