"We're taking steps to reduce surplus"
Updated: 2006-04-23 10:01 April 22 -- People's Bank of China Governor Zhou
Xiaochuan said his country is adjusting its currency and taking steps to reduce
a trade surplus that tripled to a record $102 billion last year.
Zhou, in a statement a day after a meeting of the Group of Seven in
Washington, said developed countries must also do their part to remedy lopsided
global flows of goods and investment by making their exports more competitive.
Secretary John Snow (R) meets Central Bank Governor of China Zhou
Xiaochuan in Washington April 20, 2006. [Reuters]
China "is adopting further measures to expand domestic demand, encourage
consumption, open its markets, improve its exchange-rate regime, and restructure
trade," Zhou said. Developed nations should "create job opportunities and
export advantages to improve their competitiveness."
Finance ministers and central bankers from the Group of Seven yesterday called
on China and other Asian nations to allow their currencies to appreciate. G7
officials believe stronger Asian currencies and less reliance on exports
for growth are the measures to help reduce imbalances
that they thought would have jeopardized a favorable outlook for
global economic growth.
Zhou took issue with Group of Seven efforts to enhance the IMF's scrutiny of
the currency policies of its members. ``Each country is entitled to choose an
exchange-rate system consistent with its own economic development,'' he said.
The G-7 gathering followed a meeting between President George W. Bush and
Chinese President Hu Jintao at the White House.
Hu said after the meeting that the government ``will continue to make
adjustments'' in its currency system. Bush said he wanted ``more appreciation.''
Surging exports of inexpensive toys, televisions and clothing helped China's
economy expand 10.2 percent in the first quarter from a year earlier, the
fastest pace among the world's top 20 economies.
China, under pressure from the U.S., ended its currency's decade-old peg to
the dollar in July and revalued it by 2.1 percent. It said the yuan would be
allowed to move as much as 0.3 percent a day.