Greenspan promotes stronger Chinese yuan

"If they were to accelerate, not a great deal, but some, it would be quite helpful for the Chinese economy," Greenspan said. Efforts to control the value of China's currency have made "invariable problems of imbalance" in financial markets "more difficult to deal with than they need be."

Greenspan said he has told China's Central Bank Governor Zhou Xiaochuan that the world's fourth-largest economy would benefit if the value of the yuan were allowed to appreciate faster against other currencies.

"The accumulation of foreign assets required to hold exchange rates in place or gradually lift it is not something easy to handle monetarily, nor something that maintains a reasonable good balance in a domestic financial system," Greenspan said.

"China would be better off with its exchange rate moving a bit faster," he said. "I'm not at all concerned that instabilities will occur if the pace is picked up."