China has been steadily increasing the flexibility of the yuan,
but it will not bow to outside pressure for faster revaluation,
Minister of Finance, Jin Renqing, said.
"The biggest challenge for China is to maintain the sound
momentum in its economic growth," Jin told reporters during the
Asia Pacific Economic Cooperation finance ministers meeting in
Coolum, Australia. "China's currency reform should be
self-initiated, controllable and gradual," he said.
The two-day meeting, which concluded on Friday, has called for a
more flexible currency regime globally to reduce the global
economic imbalance.
Japan has been in the spotlight as the yen has pushed the Korean
won to a decade high and the New Zealand dollar to a 22-year high.
It has dampened exports of both countries.
China has also been pressured by the United States in recent
days to pick up the pace of its yuan revaluation.
The US Senate Banking Committee and Senate Finance Committee
have passed legislation respectively to increase pressure on
Washington to force Beijing to toe the line.
But economists agree that the yuan's revaluation will not be
sufficient to lift the US out of its economic woes.
The US trade deficit as well as that of some other developed
countries have arisen, fundamentally, from their incomplete and
poor industrial structures, Liu Xiahui, an economist with the
Chinese Academy of Social Sciences, said.
"The US has developed to a stage where it does not manufacture
much of the traded goods," he said. "They must be imported from
countries with lower production costs and higher
competitiveness."
The increased value of a currency will not do in the future, Liu
said, noting that even the Japanese yen has been revalued
drastically, but the country continues to enjoy huge trade
surpluses.
Many economists agree that a freely floated currency will have
little adverse impact on an advanced market with good management
expertise, but it may deal a fatal blow to the developing markets,
Liu said.
A hasty reform pace will jeopardize China's economy, economists
said.
(China Daily August 4, 2007)
