23 September 2003 10:04
China to examine mechanism for determining RMB exchange rate
Author: While maintaining a basically stable Chinese currency renminbi (RMB), China will continue to examine and
improve the mechanism for determining the RMB exchange rate, said China's central bank governor in Dubai on
September 21. Zhou Xiaochuan, governor of the People's Bank of China, made the pledge at the eighth meeting of the
International Monetary and Financial Committee (IMFC), the decision-making body of the International Monetary Fund
(IMF). "We believe the exchange rate reforms and other institutional reforms are integral parts of the overall
reform endeavor, and thus it is important to identify priorities and proper sequencing to carry out these reforms,"
he said in a speech delivered at the IMFC meeting. "At the same time, we will relax control over the capital
account in a prudent manner, and seek to achieve balance of payments equilibrium," said the bank governor, who is
in Dubai to attend the annual meetings of the World Bank and IMF. Zhou said he has noticed the international
community's recent interest in the exchange rate of RMB, and the Chinese government has always adopted an attitude
of the utmost prudence and responsibility on this issue. He mentioned that during the 1997 Asian financial crisis, a
stable RMB not only fostered economic and financial stability in China, but also helped contain the further spread of
the crisis, thus contributing substantially to economic and financial stability in Asia and around the world. "At
present, with its economy still facing various challenges, China needs to maintain the stability of its various
policies. If China can maintain healthy, rapid economic growth, this will create huge market demand and stimulate
imports," Zhou said. Official chinese statistics showed that during the period of 1998-2002, China's average
annual imports growth was 3.5 percentage points higher than the growth of exports. In 2002, China's imports from
the countries of the Association of Southeast Asian Nations (ASEAN), Japan, Russia, and Australia grew by 34 percent, 25
percent, 6 percent and 8 percent respectively against the previous year. In the first half of this year, China's
imports from the United States, Japan, Korea, the European Union and ASEAN countries increased by 36.1 percent, 46.1
percent, 53.7 percent, 39.3 percent and 55.5 percent respectively against the same period last year. Zhou pledged that
China will continue to push ahead with market-based institutional reforms, and let the market play an essential role in
resource allocation.
[AIW [Asia Africa Intelligence Wire]] |
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