Krugman said is “stealing” jobs from developing countries

China is “stealing” jobs from developing countries and hindering a global recovery by keeping the yuan low, Nobel laureate Paul Krugman says. “China’s bad behavior is posing a growing threat to the rest of the world economy,” Krugman, the Princeton University professor who won the Nobel prize for economics last year, wrote in an Oct. 22 New York Times article.

Harvard University Professor Martin Feldstein, the Reagan administration adviser who won the 1977 John Bates Clark medal for top economist under 40, said “China’s policy of expanding domestic spending while depressing the renminbi will lead to its economy overheating,” in a Financial Times article last month.

“Risks of asset-price bubbles and misallocation of resources amidst abundant liquidity need to be addressed,” Louis Kuijs, the World Bank’s senior economist in Beijing, said in a Nov. 4 report.

China won’t start allowing gains until the second half of 2010, says Peng Wensheng, head of China research at Barclays Capital in Hong Kong and former chief of China affairs at the Hong Kong Monetary Authority.