Keeping cool towards foreign calls to appreciate RMB
( 2003-08-05 14:23) (chinadaily.com.cn)
China's authorities should always keep a cool head towards mounting overseas
calls these days to raise the value of its RMB currency, some world-known
economists said in Beijing.
China does not have to appreciate its currency at the
current moment, said the experts. They said the eye-catching economic
achievements made in China are not coming from the allegedly undervalued RMB.
It is not as urgent as it was in the 1997 Asian financial crises for
China to raise the value of the RMB, said Tao Dong, an economist from the Credit
Suisse First Boston.
He said China could ease the pressure of the calls
by adjusting the interest rate, encouraging overseas investment in its domestic
enterprises and boosting overseas tourist programs for Chinese nationals.
A report from Goldman Sachs, a prestigious international investment
bank, also pointed out that the price advantage is just a small part of
increasing the competitiveness of China's commodities in overseas markets.
The real advantage of Chinese commodities comes from the availability of
a cheap but high-quality labor resource, the Goldman Sachs report said.
China's trade volume accounts for only 5 percent of the world and it
would lose few international market shares for its exports, even if the country
did appreciate its currency by 10 percent, said Morgan Stanley global chief
economist Steven Roach.
Zheng Xingjuan, the Morgan Stanley chief Chinese
economist, estimated that on condition that China freed its forex interest, a
huge amount of "hot money" would flood China's forex market seeking speculation
The Asian financial crisis was triggered by this, and
China doesn't have to suffer this painful consequence, Zheng said.