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| China's yuan exchange rate policy |
A range of officials have spoken about currency policy during the annual sessions of the NPC and CPPCC. Their comments have exposed some differing opinions on this issue.
Commerce Minister Chen Deming has been consistent since the yuan was fixed at about 6.83 to the US dollar in mid-2008. He says this stability has been good for both China and the world.
The Ministry of Commerce is focused on supporting exporters who have been hit hard during the financial crisis. Chen Deming says it might take another two to three years for exports to recover to pre-crisis levels. He notes that the direction of yuan reform will be gradual and controlled.
Central bank governor Zhou Xiaochuan said at the weekend that sooner or later China will have to end its special yuan policy, one of a range of emergency measures to cushion the blow to economic growth. Signs of increasing price pressure may be why the central bank seems to be flagging yuan appreciation as a policy option. But the fragile state of the global economy means it is wary of pushing too aggressively for a yuan rise.
Zhou Xiaochuan, governor of The People's Bank of China, said, "It's not excluded that we took unconventional policies including special formation mechanisms of the RMB exchange rate against the background of the financial crisis. These policies are part of an economic package to fight the crisis. If we are to exit from these special policies we must be extremely prudent about our choice of timing. This also includes the renminbi exchange rate policy."
The State Council is seen by many as the final authority in charting yuan policy. Premier Wen Jiabao, who heads the State Council, made stability the keyword in his comments about the yuan in his keynote speech. Nevertheless, analysts believe China's top leaders could shift gears quickly if prices soar. |
Source:CCTV.com |
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