The Yuan is China's currency but the world's problem
It is troublesome not just because it is difficult to pronounce
(youen is closer to the mark than youan
but if you say youen no one will know what youre talking about)
Nor is it because
China's leader wants the yuan to become a "powerful" currency
that could eventually offer an alternative to the dollar
The problem is more immediate the exchange rate that would stabilise China's economy
is out of whack with the rate that would balance the world economy
That is the verdict of the IMF's annual health check for China's economy released on February 18th
In currency disputes the fund is the closest thing the world has to a referee
Its new report concludes that the yuan is undervalued by about 16%
That is the biggest misalignment since 2011 when a similar calculation suggested an undervaluation of 23%
The root of the problem lies in China's property bust over four years ago
The economy's weak recovery since has left its firms scrambling
Industrial prices paid to producers have declined for 40 months in a row
Wage growth is weak and inflation is "uncomfortably low" points out Sonali JainChandra of the IMF
Falling prices at home have made Chinese goods fiercely competitive abroad
This edge is reflected in China's "real" exchange rate which is adjusted for international differences in inflation
On this measure the yuan was 15% cheaper at the end of last year than it was four years before