BEIJING, April 16 -- A senior central bank official
has rejected calls for a quicker increase in the flexibility of the renminbi
exchange rate, saying the currency's role in rectifying global economic
imbalances should not be exaggerated.
Hu Xiaolian, deputy governor of the People's Bank of
China, said more attention should instead be paid to growing protectionism to
safeguard the health of the world economy, according to a central bank statement
and Xinhua.
She was speaking in Washington on Saturday at a
conference during the semi-annual meetings of the International Monetary Fund
(IMF) and the World Bank. The meetings are a venue for key financial officials
of the two institutions' member countries to discuss global economic issues.
Officials and economists at the IMF, which has a
mandate to safeguard the global economy and render advice to member countries,
said that Beijing should pursue a more flexible exchange rate, for the sake of
both the Chinese economy and a more balanced global economy.
However, China did not seem to see the advice as
being appropriate. "The fund... should respect its member countries' core
interests and actual economic fundamentals," Hu was quoted as saying.
"Biased advice would damage the fund's role in
safeguarding global economic and financial stability."
In July 2005, China abandoned the renminbi's
decade-old peg to the US dollar and let the currency appreciate by 2.1 per cent.
Since then, it has gained almost another 5 percent against the dollar.
However, there has been a persistent international
chorus, led by the United States, arguing that China has not been moving quick
enough in letting its currency rise.
US lawmakers have said that the country's trade
deficit was partly caused by what they believed an undervalued Chinese currency.
Chinese officials say the yuan's flexibility would
gradually increase but argue that radical steps would generate shocks in the
Chinese economy which could spread to the rest of the world.
"The IMF... should attach significance to stability
of domestic economies (of member countries) when observing their contribution to
outside stability," Hu said.
She said the IMF should strengthen surveillance over
the soundness of economic policies of countries whose currencies are used as
major instruments in other countries' foreign exchange reserves. She was clearly
referring to the US, whose low savings rate, and fiscal and trade deficits are
agreed to be a key cause for global economic imbalances.
Hu also called attention to what is seen as a rising
protectionist sentiment, which has been causing troubles for China's exporters.
"We call on all countries to harness the
opportunities created by globalization... and resolutely oppose protectionism,"
she said.
BEIJING, March 29 (Xinhua) -- China Thursday urged the
United States to strengthen communications with China on the issue of RMB
exchange rate instead of exerting pressure on China.
Foreign Ministry spokesman Qin Gang told a routine
press conference China has always adopted an independent and highly responsible
attitude toward the RMB exchange rate issue.
"We maintain a reasonable level of foreign exchange
rate, and take a policy that fits with China's economic and social situation,"
said Qin, while commenting on a question that two U.S. senators have blamed the
low RMB exchange rate for the U.S.'s trade deficit with China. Full story
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