China's economy was not overheated in a wide sense, said Nobel Prize Laureate Robert Mundell in Shanghai Sunday.

Mundell, who became honorable professor with the Xinjiang Institute of Finance and Economics Sunday, said the price rise of raw materials is a universal phenomenon, but it does not mean China's economy is overheated because of the rise in the price of raw materials in the country.

According to him, a floating exchange rate system is not suitable for China, and giving up the fixed exchange rate system will bring long-term adverse impact to the country.

Compared with the possible consequences, the current inflation pressure the Chinese government faces is not a very serious problem, and the Chinese government and its central bank would not sacrifice the stability and consistency of its economic policies, he said.

Talking about "Asian Dollar," the "Father of Euro" said although it was possible to establish such a unitary monetary system in some parts of the word, he had not seen any possibility to establish such a system in the region where China and Japan are located.

Setting up such a system is mainly something political and calls for political integration, the renowned economist said, adding that he does not see any sign of it in Asia at present.

(Xinhua News Agency May 24, 2004)