BEIJING, Dec. 4 (Xinhua) -- The recent depreciation
of China's currency against the U.S. dollar was normal and China won't rely on a
weaker yuan to boost exports, Commerce Minister Chen Deming said on Thursday.
"The recent small fluctuation of the yuan against the
dollar was completely normal. I'd call it the dollar strengthening, rather than
the yuan depreciating," Chen told reporters at the fifth China-U.S. Strategic
Economic Dialogue (SED).
China has taken a self-initiated, gradual and
controllable approach to exchange rate reform since it ended the peg of the yuan
in July 2005, and the principle has never changed, the minister said.
The yuan has since gained more than 20 percent versus
the U.S. dollar as a result of market forces, Chen told reporters.
The currency had been stable since mid-September,
when the financial crisis that originated in the United States worsened and
increasingly began to affect the world, he noted.
It will remain stable if there is no big change in
the international economic environment and all countries work together to
respond to the crisis, he said.
He also said there are no signs of capital flowing
out of China, which is still a good destination for foreign investment. Analysts
said a weaker yuan could trigger capital flight.
The yuan fell as low as 6.8845 per U.S. dollar on the
over-the-counter market on Thursday morning, declining by the 0.5 percent daily
limit. It is allowed to trade by up to 0.5 percent against the U.S. dollar on
either side of the central parity (reference) rate.
The depreciation this week sparked speculation that
China was shifting its exchange rate policy to allow the yuan to weaken to help
struggling exporters and save jobs.
"The current difficulty for exports is caused by
market shrinkage. I don't count on the yuan's depreciation to boost exports,"
Chen stated.
"We think it is too early to see the latest move as a
signal of a significant change in China's exchange rate policy," Tao Wang at UBS
Securities wrote in a note on Wednesday.
The reference rate has been kept stable despite the
fall by the daily limit on the over-the-counter market. Analysts said this
situation showed the central bank didn't want a big shift in the exchange rate
policy.
Wang warned the yuan's depreciation could run the
risk of leading to protectionist responses from China's major export markets and
a round of competitive devaluations in neighboring economies.
The yuan had for months remained steady against the
U.S. dollar until the recent retreat. But it has appreciated by about 10 percent
against the trade-weighted basket of currencies since August, as the U.S. dollar
strengthened significantly against other major currencies, Wang noted.
Tan Yaling, a research analyst with the Bank of
China, also believed the recent movement of the yuan was "normal and rational
"market behavior as the currency has gained 20 percent against the U.S. dollar
since July 2005.
The depreciation will "help remove some of the
market's 'one-way-bet' mentality. We had been expecting some modest yuan
weakness in the first half of 2009," Standard Chartered said in a note on
Wednesday.
Wang forecast the yuan's rate against to the U.S.
dollar would weaken to 7.0 by the end of 2008, but it could advance again to 6.8
at the end of 2009.
But if the U.S. dollar strengthened by more than 10
percent against the currencies of China's main trading partners, the yuan might
weaken by about 5 percent against the U.S. currency, she added.
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
