Special Report: Global Financial Crisis
¡¡BEIJING, Dec. 4 (Xinhua) -- Chinese economists said they believed the recent yuan devaluation was caused by "objective factors," but the currency's
long-term trend should not face a reversion, as strategic China-U.S. economic
talks opened here Thursday.
China's currency weakened on Thursday. The yuan
traded at 6.8837 per U.S. dollar as of 14:30 p.m. on over-the-counter market,
from 6.8830 on Wednesday. It dropped to as low as 6.8845 per U.S. dollar in the
morning.
The central parity rate of the yuan was 6.8502 yuan
to the U.S. dollar on Thursday, according to the China Foreign Exchange Trading
System, the same as Wednesday.
The yuan's central parity rate is based on a weighted
average of market makers' price inquiries before the market opens on each
business day. The rate is allowed to fluctuate within a band of 0.5 percent on
either side of the mid-point.
The State Council, or the Cabinet, said it would use
a series of means, including reserve requirement ratios, interest rates and
foreign exchange rates to ensure ample liquidity for the banking system.
The Cabinet announced the decision late Wednesday at
an executive meeting, presided over by Premier Wen Jiabao. Last month, it has
unveiled a 4-trillion-yuan economic stimulus package, which aimed to offset
adverse global economic conditions by boosting domestic demand.
The statement came amid market speculation that the
yuan might depreciate against the U.S. dollar to help aid exports, which was
battered by slackening external demand.
The yuan's reference rate has gained more than 6
percent against the greenback this year, but it was up less than 0.1 percent in
the second half.
A "slight and mild" yuan depreciation was necessary
because the currency has appreciated too fast since its peg to the dollar ended
in July 2005, said Hua Min, department chief of world economy with
Shanghai-based Fudan University.
A weaker yuan could help boost exports during the
crisis, Hua said.
Tan Yaling, a research analyst with the Bank of
China, believed the recent movement of the yuan was "normal and rational" market
behavior as the currency has gained nearly 20 percent against the U.S. dollar
since July in 2005.
However, the possibility of a periodic depreciation
could not be ruled out, said Ding Zhijie, deputy dean of the finance school with
the University of International Business and Economics.
According to Ding, the depreciation pressure came
from the strengthening U.S. dollar and concerns about downward pressure on the
economy as the financial crisis, which has evolved into an economic crisis,
weighed on the economy.
A steep depreciation would not be possible currently,
forecast China Academy of Social Sciences economist Liu Yuhui, which was likely
to cause a range of negative impacts, including increasing capital outflow and
deteriorating trade friction and protectionism.
Thursday also marked the first day of the fifth
China-U.S. Strategic Economic Dialogue. A range of economic issues would be
discussed, including the U.S. economy's recession and China's reduced economic
growth.
Chinese Vice Premier Wang Qishan and the U.S.
Treasury Secretary Henry Paulson co-chaired the opening dialogue on Thursday
morning.
Economist: China has "limited scope"
for yuan depreciation against dollar
BEIJING, Dec. 3 (Xinhua) -- China has "very limited scope"
to keep its currency, the yuan, depreciating against the U.S. dollar in the
coming year, UBS Securities said on Wednesday.
The yuan, or Renminbi (RMB), weakened to 6.8870 against
the U.S. dollar on the over-the-counter market on Tuesday, declining by the 0.5
percent daily limit for a second day. The RMB is allowed to trade by up to 0.5
percent against the greenback on either side of its central parity rate. Full story
Think tank: China economy to grow more than 9% in 2009
BEIJING, Dec. 2 (Xinhua) -- Chinese economy is forecast to grow by more than 9 percent next year, according to an annual blue paper released by the Chinese Academy of Social Science on Tuesday.
Despite the huge uncertainty in 2009, China could still achieve a 9-percent growth as long as it unveils timely and suitable macro-economic control measures to boost domestic demand, said the blue paper. Full story
China to set strategy for 8% GDP growth
BEIJING, Dec. 3 -- China's top economic policy makers will meet next week to decide how to secure growth of at least 8 percent, outpacing the World Bank's more pessimistic forecast, government officials said Tuesday.
The annual Central Economic Work Conference, scheduled for Monday through Wednesday, will tackle ways to implement the recently adopted "expansive" fiscal policy and "moderately easy" monetary policy, officials said. Full story
China planner offers details on 4 trln yuan stimulus package
BEIJING, Nov. 14 (Xinhua) -- A senior Chinese planning official told reporters here on Friday that the new 4 trillion yuan (586 billion U.S. dollars) economic stimulus package includes 1.18 trillion yuan from the central government through 2010.
Mu Hong, vice director of the National Development and Reform Commission (NDRC), said the agency would add 100 billion yuan of new investment during the fourth quarter. Full story
China outlines tasks for next year's economic work
BEIJING, Nov. 28 (Xinhua) -- The Political Bureau of the Communist Party of China (CPC) Central Committee convened a meeting here on Friday, analyzing and studying the economic work of next year and setting out major tasks.
The meeting said that this year has been eventful and the country has risen to many daunting challenges, including the global financial crisis and domestic natural disasters. The economy has maintained a stable and relatively fast growth and society has been stable, which are hard-won achievements, it said. Full story
