The comments by David Hale, chairman of Hale Advisors, support the perception of many observers that the central bank has shifted to a policy of slower yuan
"I had lunch with the People's Bank of China on Friday, and they told me that they're going to slow down the appreciation of the currency here," Hale told a meeting of the World Economic Forum in the northern Chinese port city of Tianjin.
"If they do that, they have to intervene, so China will be providing for America next year another $200-300 billion of demand for U.S. Treasury bills," he said.
In a discussion on the future role of the dollar in the global economy, Hale cited China's policy as one reason to believe that the United States would continue to be able to cover its budget deficit, even if it carries out the massive financial bailout plan under discussion in the U.S. Congress.
The yuan closed at 6.8485 against the dollar on Friday, the last trading day of the third quarter before a week-long national holiday, little changed from the level at the end of June.
That came after the yuan appreciated about 6.5 percent in the first six months of the year. Many economists have now changed their forecasts for the yuan to account for a slower pace in the coming months.
Hale added that he thought China's increasing role in the global economy would mean that the yuan, or renminbi (RMB), would one day become a global reserve currency, though that would take time on account of China's capital restrictions.
"Given China's evolving role, there's no doubt the RMB will assume a global role in time," he said. "We're talking 20 years from now, not in the next few years," he said. (Reporting by Jason Subler; Editing by Jacqueline Wong)