China working on Yuan / Renminbi reform timetable
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World
China working on Yuan / Renminbi reform timetable
By Finfacts Team
Apr 23, 2005, 17:40
Peoples' Bank of China Governor Zhou Xiaochuan
China's Central bank governor said on Saturday there were no serious political or technical impediments to reform of its current fixed currency system and the timetable for any change was under review.
The Peoples' Bank of China chief Zhou Xiaochuan refused to comment on when China would float the yuan (yuan is Mandarin for unit, while renminbi means peoples' currency), but he said that expectations were "too high" that a change in the Chinese currency system would have a significant impact on trade with the United States.
China had a trade surplus with the US of $162 billion in 2004 and in the past week both President Bush and Fed Chairman Alan Greenspan have criticised China's fixed link to the US dollar at a rate of 8.28 yuan, which as been in place since 1995.
The Bush Administration claims that the yuan is undervalued by as much as 40 percent and it is under pressure from the US Congress where there is significant support for a measure sponsored by Senator Charles Schumer of New York, which provides for punitive sanctions if the Chinese do not float the currency.
US manufacturers claim that China has cost America millions of jobs.
Zhou told reporters at an economic conference on the island of Hainan, that work had to be done to strengthen the big commercial banks, to develop China's foreign exchange market and to reduce some "over-control in the foreign exchange side."
Zhou said: "There are, I think, no serious political obstacles. We say that for the exchange rate regime, technically we are ready. But for the reform sequencing, we have our own sequencing considerations. Whether some preparations are already fully done is under certain kinds of review," he added. "People still have a different opinion on that."
Zhou told the conference that the country was on a clear path of reform, and noted that international pressure was not all bad and would force China to speed up reforms to keep conflicts from accumulating.
China's Foreign Exchange Reserves
Separately, China's State news agency Xinhua reports that China's foreign exchange (forex) reserve grew by $206.68 billion in 2004 on the back of surpluses in both current capital and financial accounts, according to a report issued by the country's forex regulator on Friday.
The State Administration of Foreign Exchange (SAFE) said the forex reserve amounted to $609.93 billion, at the last year-end -second only to Japan- while the renminbi exchange rate remained stable all through 2004. Current account surpluses in international payments reached $68.66 billion including $58.98 billion from cargo trade, as against a deficit of $9.7 billion dollars from service trade.
Capital and financial accounts recorded a surplus of $110.66 billion dollars, up 110 percent year on year. The SAFE noted that foreign direct investment remained the major means of capital inflow for China -- adding up to $53.13 billion last year.
Economic Growth of 8.9 percent in 2005
This year China's economy will grow 8.9 percent, according to a forecast released by the Chinese Academy of Social Sciences (CASS) on Friday.
The CASS expects actual fixed asset investment growth to be around 14.9 percent this year, saying the total retail sales of consumer goods may rise by about 10 percent in the country, almost the same as last year.
China's foreign trade is expected to increase by 30 percent, according to the CASS report.
The CASS report warned against the possible overheating fixed asset investment and inflation problem, saying the investment is contributing more to China's GDP (gross domestic product) increase.
In 2004 total fixed asset investment accounted for 51.5 percent of China's GDP, and the CASS estimated that this ratio will exceed 54 percent this year.
The report forecasts a 3.4 percent annual growth in the consumer price index (CPI) this year, attributing the CPI rise to the price hike of raw materials, grain and crude oil.
© Copyright 2005 by Finfacts.com
World
China working on Yuan / Renminbi reform timetable
By Finfacts Team
Apr 23, 2005, 17:40
Peoples' Bank of China Governor Zhou Xiaochuan
China's Central bank governor said on Saturday there were no serious political or technical impediments to reform of its current fixed currency system and the timetable for any change was under review.
The Peoples' Bank of China chief Zhou Xiaochuan refused to comment on when China would float the yuan (yuan is Mandarin for unit, while renminbi means peoples' currency), but he said that expectations were "too high" that a change in the Chinese currency system would have a significant impact on trade with the United States.
China had a trade surplus with the US of $162 billion in 2004 and in the past week both President Bush and Fed Chairman Alan Greenspan have criticised China's fixed link to the US dollar at a rate of 8.28 yuan, which as been in place since 1995.
The Bush Administration claims that the yuan is undervalued by as much as 40 percent and it is under pressure from the US Congress where there is significant support for a measure sponsored by Senator Charles Schumer of New York, which provides for punitive sanctions if the Chinese do not float the currency.
US manufacturers claim that China has cost America millions of jobs.
Zhou told reporters at an economic conference on the island of Hainan, that work had to be done to strengthen the big commercial banks, to develop China's foreign exchange market and to reduce some "over-control in the foreign exchange side."
Zhou said: "There are, I think, no serious political obstacles. We say that for the exchange rate regime, technically we are ready. But for the reform sequencing, we have our own sequencing considerations. Whether some preparations are already fully done is under certain kinds of review," he added. "People still have a different opinion on that."
Zhou told the conference that the country was on a clear path of reform, and noted that international pressure was not all bad and would force China to speed up reforms to keep conflicts from accumulating.
China's Foreign Exchange Reserves
Separately, China's State news agency Xinhua reports that China's foreign exchange (forex) reserve grew by $206.68 billion in 2004 on the back of surpluses in both current capital and financial accounts, according to a report issued by the country's forex regulator on Friday.
The State Administration of Foreign Exchange (SAFE) said the forex reserve amounted to $609.93 billion, at the last year-end -second only to Japan- while the renminbi exchange rate remained stable all through 2004. Current account surpluses in international payments reached $68.66 billion including $58.98 billion from cargo trade, as against a deficit of $9.7 billion dollars from service trade.
Capital and financial accounts recorded a surplus of $110.66 billion dollars, up 110 percent year on year. The SAFE noted that foreign direct investment remained the major means of capital inflow for China -- adding up to $53.13 billion last year.
Economic Growth of 8.9 percent in 2005
This year China's economy will grow 8.9 percent, according to a forecast released by the Chinese Academy of Social Sciences (CASS) on Friday.
The CASS expects actual fixed asset investment growth to be around 14.9 percent this year, saying the total retail sales of consumer goods may rise by about 10 percent in the country, almost the same as last year.
China's foreign trade is expected to increase by 30 percent, according to the CASS report.
The CASS report warned against the possible overheating fixed asset investment and inflation problem, saying the investment is contributing more to China's GDP (gross domestic product) increase.
In 2004 total fixed asset investment accounted for 51.5 percent of China's GDP, and the CASS estimated that this ratio will exceed 54 percent this year.
The report forecasts a 3.4 percent annual growth in the consumer price index (CPI) this year, attributing the CPI rise to the price hike of raw materials, grain and crude oil.
© Copyright 2005 by Finfacts.com
posted by Eastlaw at Monday, April 25, 2005
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