BEIJING, Nov. 18 -- China should resist U.S. demands to allow the yuan to further increase in value because such tactics violate World Trade Organization rules, said Robert Mundell, a Columbia University economics professor who won the Nobel prize in 1999.

    "A common figure cited for another move, 20 to 25 percent, would be devastating to China, which would cause deflation, cut economic growth, cut off foreign direct investment and would destabilize Asia,'' Mundell said in an interview on the sidelines of the Asia-Pacific Economic Cooperation meeting in Busan, South Korea.

    A congressionally appointed panel in the United States on Nov. 9 called China's revaluation of the yuan an "extremely limited step" and said U.S. Congress should consider tariffs against Chinese imports. It urged lawmakers to file a complaint before the WTO unless China revalues its currency by at least a quarter.

    China's Trade Minister Bo Xilai said Wednesday attempts by U.S. lawmakers to impose the tariffs may spur a bilateral dispute.

    U.S. manufacturers and unions have joined lawmakers in pressing U.S. President George W. Bush to crack down on what they say are China's "unfair" trade practices, such as undervaluing its currency, providing cheap loans to companies and cutting taxes for domestic producers.

    China's trade surplus swelled to a record US$12 billion in October from US$7.56 in September, the Beijing-based customs bureau said in a Nov. 10 statement. Exports rose 29.7 percent from a year earlier, outpacing a 23.4 percent gain in imports.

    (Source: Shenzhen Daily/Agencies)