Two prominent Beijing economists are urging the government to let the yuan float freely as a way to limit the country's immense foreign-exchange reserves, fight inflation and spur the remaking of the Chinese growth model.
"We should quickly stop buying foreign exchange in the market," said Huang Yiping, an economist at Peking University's China Macroeconomic Research Center, told The Wall Street Journal.
"We can have a conditional free float; let the exchange rate be set by the market," Mr. Huang said, adding that under such conditions he figures the yuan would appreciate about 30% in a year, to about five yuan to the dollar.
Mr. Huang is working on his proposal with Yu Yongding, a former adviser to the central bank and a professor at the Chinese Academy of Social Sciences. Mr. Yu in March published an article called "Learning to Float," in which he argued that the Chinese government "should be able to help enterprises and workers that suffer undue pain from the renminbi's appreciation."