China Signals Yuan May Be Inflation Tool

By JASON DEAN And TOM ORLIK

BEIJING—In official comments that have fueled speculation about faster appreciation of the yuan, senior Chinese leaders seem to be acknowledging an argument long made by Washington and others that a stronger yuan may be helpful in taming the country’s rising inflation.

U.S. officials, and many economists, have argued that an artificially cheap Chinese currency, while boosting China’s exports, is ultimately self-defeating because it adds to inflation, in part because export earnings flood the economy.

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