4-5 yuan per dollar 'inevitable': Japan's China envoy
7/26/10
TOKYO: Japan's new ambassador to Beijing said Monday he expected to see China's currency appreciate as much as 40 percent, as he reiterated earlier calls for closer trade ties.
"The trend of a stronger yuan is unstoppable," Uichiro Niwa told reporters at a news conference ahead of his departure to assume the Beijing post later this month.
"I personally think that the Chinese yuan will inevitably reach four to five yuan-per-dollar within several years," said the former businessman.
Washington has pressured Beijing recently to let its currency appreciate further.
Some US lawmakers have said that the unit is undervalued by as much as 40 percent, giving Chinese exporters an unfair trade advantage.
The People's Bank of China pledged last month to loosen its grip on the yuan exchange rate and allow the currency to trade more freely against the dollar, albeit within a tight band, amid criticism that it was undervalued.
The yuan had been effectively pegged at 6.8 to the dollar since mid-2008 but has appreciated 0.7 percent since the announcement.
US Treasury Secretary Tim Geithner recently exerted renewed pressure on China by saying the administration of US President Barack Obama was more interested in how far Beijing was willing to let the currency strengthen.
Niwa, formerly a senior corporate adviser at trading house Itochu Corp, was appointed to the key post as Japan's first ambassador to China from outside the government sector since the two countries normalised ties in 1972.
He has urged Japan to start trade talks with China as soon as possible, warning the world's second-largest economy "will sink" otherwise.
"There is a giant market right there for Japan," Niwa told reporters ahead of his departure for Beijing.
"China has a deal with ASEAN and just signed a major pact with Taiwan. China is also starting talks with South Korea. How about Japan? It hasn't had a deal with any of them."
Japanese business lobbies have urged the government to start trade talks with major economies such as China and the United States, but concerns over the impact on farmers have hindered such negotiations.
Niwa criticised Tokyo's protectionist policy for the domestic agricultural market, especially rice farmers, for whom Japan imposes super-high tariffs on foreign rice.
"Farmers are precious assets for a country, and of course they have to be protected. But they way the government tries to protect them is utterly wrong," he said.
"Japanese rice is more valuable than you think. It is very competitive and can be a good export item," he said, in light of a stronger yuan that would eventually balance out China's competitiveness.
"Japan does not need to be so afraid of signing the FTA."
The appointment of Niwa, a straight-talker who has actively served on various key government panels, came as Prime Minister Naoto Kan has advocated a greater role for private sector figures in ambassador posts.
7/26/10
TOKYO: Japan's new ambassador to Beijing said Monday he expected to see China's currency appreciate as much as 40 percent, as he reiterated earlier calls for closer trade ties.
"The trend of a stronger yuan is unstoppable," Uichiro Niwa told reporters at a news conference ahead of his departure to assume the Beijing post later this month.
"I personally think that the Chinese yuan will inevitably reach four to five yuan-per-dollar within several years," said the former businessman.
Washington has pressured Beijing recently to let its currency appreciate further.
Some US lawmakers have said that the unit is undervalued by as much as 40 percent, giving Chinese exporters an unfair trade advantage.
The People's Bank of China pledged last month to loosen its grip on the yuan exchange rate and allow the currency to trade more freely against the dollar, albeit within a tight band, amid criticism that it was undervalued.
The yuan had been effectively pegged at 6.8 to the dollar since mid-2008 but has appreciated 0.7 percent since the announcement.
US Treasury Secretary Tim Geithner recently exerted renewed pressure on China by saying the administration of US President Barack Obama was more interested in how far Beijing was willing to let the currency strengthen.
Niwa, formerly a senior corporate adviser at trading house Itochu Corp, was appointed to the key post as Japan's first ambassador to China from outside the government sector since the two countries normalised ties in 1972.
He has urged Japan to start trade talks with China as soon as possible, warning the world's second-largest economy "will sink" otherwise.
"There is a giant market right there for Japan," Niwa told reporters ahead of his departure for Beijing.
"China has a deal with ASEAN and just signed a major pact with Taiwan. China is also starting talks with South Korea. How about Japan? It hasn't had a deal with any of them."
Japanese business lobbies have urged the government to start trade talks with major economies such as China and the United States, but concerns over the impact on farmers have hindered such negotiations.
Niwa criticised Tokyo's protectionist policy for the domestic agricultural market, especially rice farmers, for whom Japan imposes super-high tariffs on foreign rice.
"Farmers are precious assets for a country, and of course they have to be protected. But they way the government tries to protect them is utterly wrong," he said.
"Japanese rice is more valuable than you think. It is very competitive and can be a good export item," he said, in light of a stronger yuan that would eventually balance out China's competitiveness.
"Japan does not need to be so afraid of signing the FTA."
The appointment of Niwa, a straight-talker who has actively served on various key government panels, came as Prime Minister Naoto Kan has advocated a greater role for private sector figures in ambassador posts.