BEIJING, Nov. 28 (Xinhua) -- The Chinese government
would further allow the market to determine the RMB exchange rate and more
flexibility to the RMB band, Chinese Premier Wen Jiabao said Wednesday.
Wen made the remarks during a speech at the fourth
EU-China Business Summit held here, which attracted about 500 entrepreneurs from
China and the European Union (EU).
However, the premier also emphasized China would
improve the RMB exchange rate regime "in a proactive, manageable and gradual
manner," with a view to gradually enabling capital account convertibility.
Some Western countries have been pressuring China to
revalue its currency RMB at a faster pace, complaining the exchange rate is the
cause of global economic imbalance and mounting trade deficits they suffer from.
The Chinese premier obviously has a different view on
the issue. "Exchange rate is a cause, but not the sole decisive factor, for
trade deficits," he said.
"Since the RMB appreciated, China has seen no
dwindling exports, which is a testimony to the existing global industrial
structure and the competitive advantages enjoyed by Chinese products," he added.
Wen said the RMB exchange rate against the euro is
determined by the RMB to U.S. dollar rate and the U.S. dollar to euro rate in
the international market, adding the recent plunge of U.S. dollar was the main
cause of an appreciating euro.
The premier also emphasized the importance of
"moderate" revaluation of the yuan.
"The moderate tunings of the RMB exchange rate have
been a source of stability for the Chinese economy and businesses, as well as
its neighboring economies," he said.
China discontinued the yuan's peg from the U.S.
dollar on July 21, 2005. Over the past two years, the RMB has appreciated 11.9
percent against the U.S. dollar and 7.4 percent against the Japanese Yen.
The yuan's central parity rate was 7.3899 against one
U.S. dollar and 10.9614 against one euro on Wednesday.
The Chinese government has proactively and steadily
advanced reform into the RMB exchange rate regime. It widened the yuan's daily
trading band against U.S. dollar from plus or minus 0.3 percent to 0.5 percent
China, EU to jointly avoid
fluctuations of exchange rate
BEIJING, Nov. 27 (Xinhua) -- China and the European
countries using the same currency Euro will work together to avoid big
fluctuations of foreign exchange rates.
The message was conveyed when China's central bank
governor Zhou Xiaochuan met with a group of senior officials of the European
Union (EU) visiting China. Full story