PBOC’s Su Says Long-Term Yuan Gains Good for China (Update1)
March 06, 2010, 12:52 AM EST
(Adds deputy central banker comments in second paragraph.)
March 6 (Bloomberg) -- A gradual, long term appreciation of the yuan is good for China, People’s Bank of China Deputy Governor Su Ning said today at parliamentary meetings in Beijing.
A one-off appreciation of the yuan won’t reduce the nation’s trade surplus, which is caused by a disparity between domestic supply and demand and not by the yuan’s exchange rate, Su said. The yuan’s exchange rate should be determined based on China’s domestic conditions, Su said.
China halted the yuan’s appreciation against the dollar as the global financial crisis sapped demand in the U.S. and Europe and Chinese exports declined for 13 consecutive months starting in November 2008. Exports returned to monthly gains in December and the nation’s foreign exchanges reserves soared to a record $2.4 trillion at the end of 2009 as the global economy recovered.
China seeks a basic balance in foreign trade and not a trade surplus, Su said. It also doesn’t want to accumulate large foreign currency reserves, he said.
The nation’s trade surplus in January was $14.2 billion, a 64 percent decline from a year earlier, according to government data. China’s trade surplus for the first two months of this year fell 50 percent from the same period of 2009, Minister of Commerce Chen Deming said at a briefing in Beijing today.
Su said the government will focus on increasing domestic consumption to spur economic growth, including raising wages for the nation’s workers. Higher wages will spur consumption and help offset lower exports, he said.
March 06, 2010, 12:52 AM EST
(Adds deputy central banker comments in second paragraph.)
March 6 (Bloomberg) -- A gradual, long term appreciation of the yuan is good for China, People’s Bank of China Deputy Governor Su Ning said today at parliamentary meetings in Beijing.
A one-off appreciation of the yuan won’t reduce the nation’s trade surplus, which is caused by a disparity between domestic supply and demand and not by the yuan’s exchange rate, Su said. The yuan’s exchange rate should be determined based on China’s domestic conditions, Su said.
China halted the yuan’s appreciation against the dollar as the global financial crisis sapped demand in the U.S. and Europe and Chinese exports declined for 13 consecutive months starting in November 2008. Exports returned to monthly gains in December and the nation’s foreign exchanges reserves soared to a record $2.4 trillion at the end of 2009 as the global economy recovered.
China seeks a basic balance in foreign trade and not a trade surplus, Su said. It also doesn’t want to accumulate large foreign currency reserves, he said.
The nation’s trade surplus in January was $14.2 billion, a 64 percent decline from a year earlier, according to government data. China’s trade surplus for the first two months of this year fell 50 percent from the same period of 2009, Minister of Commerce Chen Deming said at a briefing in Beijing today.
Su said the government will focus on increasing domestic consumption to spur economic growth, including raising wages for the nation’s workers. Higher wages will spur consumption and help offset lower exports, he said.