China will call on the world's most developed nations to strive for exchange rate stability to assist the economic growth of developing countries when Finance Minister Jin Renqing attends the G7 meeting in London next month.
Zhu Guangyao, head of the Ministry of Finance's International Department, told a business forum Wednesday that Jin had accepted an invitation to attend the meeting of Group of Seven (G7) finance ministers in the UK capital on February 4 and 5.
Speaking at the Beijing launch of the Chinese-language version of the UK-based Economist Group's publication, The World in 2005, Zhu said: "China hopes rich nations will make more of an effort to maintain a stable forex market, as keeping relatively stable exchange rates between major currencies like the US dollar, euro and Japanese yen is of great significance to the world's economy."
The governor of the People's Bank of China, Zhou Xiaochuan, will also attend the meeting, where the ministers from the US, Canada, Germany, France, Italy, the UK and Japan will gather.
Along with China, representatives of other major emerging economies such as India, Russia and Brazil will also take part in the talks.
Building a new world economic order will be central to discussions, as current structures, established more than half a century ago, are increasingly recognized as not reflecting today's economic realities.
"The phenomenal changes that have taken place since World War II are not being properly and fairly addressed," said Zhu.
In response to reporters' questions after the forum, he also indicated that China will be open to discussion about the renminbi's exchange rate during the G7 talks.
He said the meeting would certainly touch on the issue, and "we would like to discuss it in the context of international cooperation."
But he stressed that although such issues can be discussed, there cannot be any external pressures. "For any country, the exchange rate issue should be decided by the sovereign state," he said.
Pressure to revalue the renminbi has been building, but Zhu said the country needs to maintain currency stability at the moment.
He said China has taken gradual measures to relax its control of the capital market to further integrate it with the global economy.
For example, it has allowed in principle the renminbi-denominated bond issuances of three foreign institutions -- the International Finance Corp, the Asian Development Bank and the Japan Bank for International Cooperation.
The move is seen as a major step towards liberalizing the domestic bond market.
Internationally, China will continue to issue sovereign bonds in overseas markets supported by confidence in its economic growth.
Also at the business forum, Steven Barnett, resident representative of the International Monetary Fund in China, said economic prospects are favorable in the medium term and he projected that the nation's economy will grow by around 8.5 percent this year.
(China Daily January 27, 2005)
