China to push for yuan flexibility
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China.org.cn, December 29, 2011
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The value of the yuan has risen 4 percent against the US dollar this year. [Photo/CNS] |
China will continue to increase the flexibility of RMB exchange rate and boost domestic consumption, a foreign ministry spokesman said Wednesday.
Since June last year, the yuan exchange rate had become increasingly flexible, spokesman Hong Lei said at a news briefing in Beijing.
China's foreign trade is balanced overall and the percentage of trade surplus to GDP is declining, he said.
In the first three quarters of this year, the nation's current account surplus was 3 percent of GDP, compared to 5.1 percent in the same period of last year.
In its semi-annual report to Congress on the currency policies, the US Treasury said that the RMB was still undervalued.
The US Treasury said that based on China's foreign exchange reserves and current account surplus, "the real exchange rate of the renminbi is persistently misaligned and remains substantially undervalued."
Some US politicians argued that the yuan's undervalued exchange rate gave Chinese exports an unfair advantage in overseas markets.
The US had a US$273 billion trade deficit with China last year.
The US Senate passed a bill this year that would require US government to impose penalties on Chinese imports if it did not adopt market-based exchange rates.
The value of the yuan has risen 4 percent against the US dollar this year and 7.7 percent since China dropped a firm peg against the greenback in June 2010.
China will maintain the exchange rate of the yuan "basically stable" in 2012, said a statement issued after the country's central economic work conference closed in mid-December.
The country will also deepen the market-oriented reform of its interest rate and reform on the formation mechanism of the yuan's exchange rate, according to the statement.
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