Bloomberg | March 30, 2010 | 06:57 EDT
China may refloat its currency next month, helping to counter criticism it’s giving its exporters an unfair advantage, said Stephen Jen of BlueGold Capital Management LLP. “I maintain the view that it is likely that China refloats the RMB in April,” before a meeting of US and Chinese officials in Beijing, Jen, a managing director at BlueGold in London, wrote in a report to clients today.
Officials in Beijing have resisted allowing gains in the yuan, having controlled its value since July 2008 after it strengthened 21 percent against the dollar in the previous three years. The status quo has drawn criticism from European and US policy makers, who say keeping the currency undervalued has given China’s exporters an edge and is inflating asset bubbles. Allowing the yuan to gain “should help diffuse much of the risks associated with trade protectionism and allow China to resume building the institutional framework necessary to conduct monetary policies independent from those of the Fed,” said Jen, a former chief currency strategist at Morgan Stanley.
Reuters | Thu Mar 18, 2010 | 8:30pm IST
India is unlikely to join other states in putting pressure on China to revalue its Yuan currency, Kaushik Basu, chief economic adviser in the finance ministry, told Reuters on Thursday. The Chinese currency’s fixed peg has stoked tensions between Beijing and Washington, with the United States piling pressure on China to let the Yuan climb. Basu said a rate hike by India’s central bank was likely. He said headline inflation may cross into double digits or be around a high single-digit number soon but start easing from May or June. Inflation climbed to 9.89 percent in February.
Several lawmakers in the United States have demanded sanctions against China unless the Asian giant abandons its fixed currency peg, which has helped it run up a huge trade surplus. However, China has stood firm on its position of not letting the Yuan appreciate. Countries in the region like Japan and India have been cautious in commenting on the issue. “I really don’t see India joining in and say look let us work with you (the U.S.) and pressure China on changing its exchange rate policy,” Basu told Reuters in an interview. He said it was unlikely that India would take up the issue in an international forum like the G20. Continue reading
Wednesday, 10 March 2010 | 08:36 GMT
China’s exports jumped by 46% in February compared with a year ago, raising hopes of a strong recovery in global trade. The increase was higher than analysts’ expectations of a rise of between 35% and 40%. It is likely to increase pressure on the Chinese government to raise the value of the Yuan, which the US in particular complains is undervalued. China’s imports also rose strongly, increasing by 44.7% last month. The big growth in imports was helped by the government’s economic stimulus spending. The rise in imports reduced China’s trade surplus to a one-year low of $7.6bn (£5bn) for February.
Yuan to rise?
Beijing had kept the Yuan at the same level against the US dollar for 18 months, to help its exporters. This has angered the US, which says the Chinese government keeps the Yuan unfairly undervalued, and Washington continues to call on Beijing to allow the currency to float freely to reflect its true market value. "The recovery seems to have gained legs and this will give China’s government more confidence to start revaluing the Yuan," said Ren Xianfang, an economist at IHS Global Insight in Beijing. However, China’s central bank governor, Zhou Xiaochuan, said at the weekend that the government was "very cautious" about easing exchange rate controls because the global economic outlook was still uncertain.
Reuters | BEIJING | Mon Dec 28, 2009 | 4:02pm IST
Beijing will not relax its efforts to sell Chinese products overseas in 2010 and seek a bigger share in the global market, China’s vice trade minister said on Sunday. China, which may have replaced Germany to be the world’s largest exporter in 2009, is a “big trading nation” but not yet, a “powerful trading nation,” vice commerce Minister Zhong Shan said. “China’s exports in 2010 will grow, and there’s no doubt about that,” Zhong said, declining to provide detailed forecasts. China’s exports were hit hard by the global financial turmoil, falling 18.8 percent in the first 11 months from a year earlier. But the market share for Chinese products has increased in 2009 as sales from other countries have fallen even more deeply, Zhong told a forum at the University of International Business and Economics in Beijing.
Other countries have blamed China’s unofficial policy of repegging the Yuan to the dollar since the summer of 2008 for making its products artificially competitive. China will feel pressure on its Yuan policy but will maintain “basic stability” Zhong said, in a reiteration of long-standing government policy. He said export growth is vital for China to drive economic growth and create jobs Continue reading
Reuters | BEIJING | Sun Dec 27, 2009 | 4:57pm IST
Chinese Premier Wen Jiabao on Sunday struck a defiant note about the country’s controversial exchange rate policy, saying the government would not give into foreign demands to let the Yuan rise. Wen said the currency was facing growing pressure to appreciate, but insisted that China was committed to keeping it stable, having virtually pegged it to the dollar since the global financial crisis worsened in the middle of last year. “We will not yield to any pressure of any form forcing us to appreciate. As I have told my foreign friends, on one hand, you are asking for the Yuan to appreciate, and on the other hand, you are taking all kinds of protectionist measures,” he said. “The true purpose (of these calls) is to contain China’s development,” he added in an interview with the official Xinhua news agency.
The Yuan has fallen against the currencies of most of its trading partners this year because it has been fixed to a weakening dollar, while China’s economy has bounced back strongly. U.S. senators have asked for an investigation into whether current Yuan policy represents a form of subsidy that would justify tariffs on Chinese imports. Wen also repeated an oft-made declaration that the stable Yuan had contributed to the global economic recovery. Continue reading