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MORGAN STANLEY Asia chairman Stephen Roach has said Paul Krugman’s call to push China to allow a stronger yuan is “very bad” advice and that increased Chinese spending is a better way of reducing trade imbalances.

“We should take out the baseball bat on Paul Krugman – I mean I think that the advice is completely wrong,” Mr Roach said in a Bloomberg Television interview in Beijing when asked about Mr Krugman’s request, which was characterised as akin to taking a baseball bat to China. “We’re lashing out at China rather than tending to our own business,” which is raising US savings, Mr Roach said.