|
Economists back yuan policy
(China Dailyl)
Updated: 2005-04-09 08:57
China is doing the right thing rejecting requests from trading partners to
adjust its currency regime, according to financial officials and economists
attending the Beijing Forex Conference 2005 on Friday.
"China does not operate a competitive currency policy and its foreign
exchange policy is transparent and consistent," said Desmond Supple, head of
Asia research at Barclays Capital, the investment banking division of UK-based
Barclays Bank PLC.
He dismissed accusations that China has taken advantage of a cheap renminbi
to become more competitive in trade.
He told the conference that the Chinese Government's refusal to change its
forex regime can be viewed as simply wanting to maintain the consistency of its
currency just as it did during the 1997 Asian financial crisis.
He added: "Any change of the renminbi regime has to go with the advancing
process of China's financial reform."
His words were echoed by Long Yongtu, secretary-general of the Boao Forum for
Asia.
"China's banking system reform is the premise of any economic reform," said
Long.
He said that foreign trade was not the only engine for China's economic
growth. Economic reform, domestic consumption, and foreign trade and investment
are the major driving forces of China's economic growth, he said.
Long added that to liberalize the capital account, China must have a mature
banking system, strong central bank supervision and a developed secondary
financing market.
"It is unlikely China would change its forex regime in the foreseeable
future," Long said. "The country has to strike a balance between a more flexible
forex regime and a largely stable one."
Supple said the strong inflow of foreign speculative capital is also making
it less possible for the Chinese Government to adjust its forex regime this
year.
"We see no evidence of any slowdown (of speculative capital inflow) in the
first quarter of this year," Supple said.
He added that China's forex reform requires the Chinese Government be
confident that the country has achieved a soft landing from the 2002-04
investment boom and that the current problem of speculative capital inflow has
been contained.
However, the US Senate on Wednesday threatened to impose a punitive tariff of
27.5 per cent on imports from China, if the government does not adjust its forex
regime within six months. Advocates of the policy said the renminbi is
undervalued, which has disadvantaged US manufacturers and caused the large US
trade deficit with China.
| |
 |
|
|
|
|
Today's
Top News |
|
|
|
Top China
News |
|
|
|
|
|
|
|
|
|
