Brussels, 09/02/2011 (Agence Europe) - While grievances continue to be felt on both sides of the Atlantic over the undervaluation of the Chinese currency, the yuan, accused of being responsible for trade deficits, a working paper by Sylvain Plasschaert, published on Wednesday by the European Centre for International Political Economy (ECIPE), highlights the weakness of this argument. Firstly, the Belgian professor says, trade surpluses are dominated by the simple final assembly of consumer goods with little added value, and the Chinese surplus contains double-counting of foreign-made components that China must import in order to export. Secondly, the record trade surpluses alone cannot explain the massive Chinese foreign exchange reserves, which were, instead, fuelled by investment from multinational companies. Ultimately, undervaluation of the yuan and its being the cause of global deficits is, in Plasschaert's eyes, a myth. He argues that a shift in China's growth strategy, away from the single-minded focus on exports and more towards stimulating the domestic economy, will do more to bring balance to the global economy than increasing the value of the yuan. The working paper (No 2/2011) is available on the ECIPE website (http://www.ecipe.org ). (E.H./transl.rt)