U.S. News

Wu Says China Will Promote Yuan Reform at Its Own Pace


China is willing to promote flexibility of its currency, but it will keep the yuan "basically stable at a reasonable, balanced level," Vice Premier Wu Yi said on Thursday.

"I believe the floating band of the renminbi exchange rate will continue to expand as the market changes in the future," she said. "China's exchange rate reform will be advanced in an orderly way, based on the principles of self-initiative, controllability and gradualism," Wu told a
group of U.S. business leaders in Washington.

"The flexibility of the yuan's exchange rate will be continuously increased through the reform, while being maintained at a basically stable, reasonable level," she said.

She added that a large appreciation could be harmful to China's economy and that exchange rates were not the main cause of the huge U.S. trade deficit with China.

The yuan has appreciated about 8% since it was revalued by 2.1% and untethered from a U.S. dollar peg in July 2005. But many U.S. critics say that is far from enough, giving Chinese exporters an unfair advantage in world markets.

Attempts to pressure China to carry out a significant revaluation of the yuan would not be helpful, and could jeopardize the interests of the two countries, the vice premier said.

Wu also repeated China's demand that the United States end restrictions on exports of advanced technology goods to China, arguing that ending the curbs would significantly increase U.S. exports to China.

"Before the introduction of any new regulations on export control against China, relax the control of civilian purpose  high-tech product exports to China," she said, adding that China could not trim the trade imbalance by itself.

Wu, who led a large delegation of Chinese ministers in two days of "strategic economic dialogue" in Washington and met U.S. lawmakers, urged Washington to "contain protectionism that is increasing day by day."

She asserted that China was making progress in abiding by international rules on protecting intellectual property rights, or IPR, and criticized a U.S. decision to lodge two IPR cases against China in the World Trade Organization.