Exchange rate no obstacle to Brazil-China trade
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The past decade has witnessed increasingly close trade links between Brazil and China, and the Chinese yuan exchange rate was by no means a hindrance to the rapid growth in commerce between the two countries, a Brazilian scholar said Tuesday.
China is now Brazil's biggest export market and trading partner, said Dr. Alberto Sanyuan Suen, a finance professor at the University of Sao Paulo, told Xinhua.
Meanwhile, China's trade with other emerging and developing nations has also increased remarkably, proof that the exchange rate is by no means a decisive factor in trade relations, Suen said.
What are more important as to a sound trade development are the trade structures and the complementarity of the trading partners' economies, the professor said.
It's a sovereign right for any country to freely choose among the fixed exchange rate, managed floating exchange rate and floating rate, Suen said.
For instance, he said, the Brazilian government adopted a managed floating exchange rate to curb inflation in 1994 and shifted to a floating rate when things changed five years later.
No small number of scholars and politicians have now urged the government to run a managed floating exchange rate again in a bid to cool down the rapid appreciation of the Brazilian real, he said.
One could never deny the fact that as a vital part of a country's long-term economic policy, its currency exchange policy should be conducive to its economic and social development, Suen said.
In principle, one must be very careful in analyzing foreign calls on changes in exchange rates that could pose potential harm to a country's national economy, he said.
Floating exchange rates and currency appreciation have dealt hard blows to Brazil's industrial sectors and eroded their competitiveness, which in turn influenced exports, Suen said.
Therefore, there are increasing calls for depreciation of the Brazilian real to safeguard the country's long-term interests, he said.
The West made the calls for the yuan appreciation to make up for their insufficient competitiveness, Suen said.
"I believe it's a guiding principle for any nation to protect its people's interest and national economic wholesome in determining its currency exchange policy," he said.
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