World view needed in assessing RMB value
8/4/2005 8:25
Foreign Ministry spokesman Qin Gang said yesterday that China has made
"remarkable efforts'' to improve its exchange rate system and that a judgment on
whether the currency has been undervalued should be made from the perspective of
the country's position in the world economy.
Qin told a regular press
conference in Beijing that China has noted the recent discussions on China-US
economic ties within the United States Congress, as well as America's growing
trade and financial deficits.
His remarks came in response to a question
about a US Senate proposal to use tariffs to force China to relax its policy of
fixing its currency at 8.28 to the US dollar.
"As we all know, if one
country's fiscal deficit cannot be made up by its own private savings, it has to
go to foreign exchange inflows, which usually causes a deficit problem in the
current account," Qin said. "The United States should look more into domestic
means to restore its economic balance."
Qin also noted that a report from the
International Monetary Fund also determined that China's currency is not
undervalued, pointing out that China has a large trade deficit with its Asian
trading partners.
"China scored a general trade balance last year and
suffered a trade deficit in five months," Qin said.
He said China has done
much to improve its exchange rate system, referring to the acceleration of the
reform of the state-owned commercial banks, free trade in the renminbi current
account, fewer restrictions on capital accounts and the continuous opening of
the country's financial markets.
China has attracted an increasing number of
foreign investment institutions into its securities market, and the country is
gradually removing restrictions on the financial sector, Qin added.
"We think
China and the United States are two important economies and trading partners,
and the disputes and conflicts in their trade should be resolved through
consultations on an equal footing," Qin said.
Xinhua
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