.contact us |.about us
News > National News...
Search:
    Advertisement
China seeks to ease RMB revaluation pressure
( 2003-09-05 09:39) (China Daily)

The Chinese government will unlikely allow its currency, the yuan or Renminbi (RMB), to appreciate by a fairly big margin, and instead, is seeking to alleviate mounting pressure from overseas.

China seeks to ease RMB revaluation pressureSince a major reason demanding the revaluation of the yuan is that China's foreign exchange reserves grew too fast to as much as US$346.5 billion at the end of June, one of the ways the Chinese government chose to help easing the pressure in this regard is to satisfy the demand for more foreign currency from domestic enterprises and individuals.

The State Administration of Foreign Exchange (SAFE) announced on Monday that beginning Oct. 1, each Chinese resident may purchase foreign exchange worth US$3,000 for each trip abroad, much higher than the current limit of US$2,000. The amount for those who will stay abroad for half a year or longer will extend to US$5,000.

Earlier, China allowed enterprises engaged in international contractual projects, international contractual labor service and overseas shipping to retain all foreign exchange (forex) income ontheir own bank accounts.

"We will continue to take a series of positive measures to loosen appropriately control on enterprises keeping their foreign currency, enlarge the sphere of forex supply and address earnestlythe demand for rational use of foreign currency from enterprises and individuals," a senior SAFE official said.

Zhou Xiaochuan, governor of the People's Bank of China, or the central bank, disclosed Wednesday that the Chinese government supported all categories of enterprises in investing and doing business overseas, and foreign-funded firms are allowed to collectmoney directly from China's capital market.

International financial institutions were permitted to issue bonds in China, he said.

And China's immigrants and non-Chinese citizens were allowed tochange their assets in China into foreign currency and then send them overseas, Zhou added.

The QDII regime, which opened a channel for domestic investors to enter the Hong Kong stock market, should be pushed forward at the earliest possible date, said Prof. Yi Xianrong, a prestigious financial expert with the Chinese Academy of Social Sciences (CASS).

But a number of experts proposed to rather wait, until systematic drawbacks and other problems in China's two stock bourses, in Shanghai and Shenzhen, were addressed properly and market conditions matured.

Increased imports and the maintenance of the balance of international revenue and expenditure were also being taken into account by relevant state departments, and the SAFE has vowed to encourage imports appropriately to spur industrial upgrading and economic restructuring, which will cost China more foreign exchange reserves.

China's entry into the World Trade Organization (WTO) has brought large amounts of foreign goods into the country and lowered the country's trade surplus.

Noted economists foresee that China's trade surplus will stand at five to ten billion US dollars this year, far below the US$30 billion for 2002.

China's exports, basically being labor-intensive goods, accountfor just five percent of the world's total. They could not cause deflation or worse economic impacts on Japan and the United States,experts acknowledged.

These countries have long blamed China for keeping the RMB exchange rate at a low level to maintain its trade surplus.

China is now implementing a regulated and floating exchange rate regime based on market demand and supply, making the RMB yuan basically stable.

Zhou Xiaochuan, governor of the central bank, said China would continue to move toward the goal of making gradually the yuan a convertible currency, but the process would "take a fairly long period of time".

 
Close  
   
  Today's Top News   Top National News
   
+WHO: Bird flu death rises to 15; vaccination recommended
(2004-02-05)
+Solana: EU ready to lift China arms embargo
(2004-02-05)
+Nation tops TV, cell phone, monitor production
(2004-02-05)
+Absence ... still makes China hot
(2004-02-05)
+Hu: Developing world in key role
(2004-02-04)
+China confident of curbing bird flu: official
(2004-02-05)
+Absence ... still makes China hot
(2004-02-05)
+Department store faces music in copyright case
(2004-02-04)
+Official: Bird flu basically under control in China
(2004-02-05)
+Possible punishment for gay pimps
(2004-02-05)
   
  Go to Another Section  
     
 
 
     
  Article Tools  
     
   
     
  Related Articles  
     
 

+Need for stable yuan stressed
2003-09-02

+US blaming of yuan misplaced
2003-09-03

+China right to show caution with exchange rate: IMF chief
2003-09-03

+Seattle Post: Let China set its own currency
2003-09-03

+Premier: Stable RMB rate benefits all
2003-09-04

+Rejection of speedy change may spark more trade disputes
2003-09-05

   
        .contact us |.about us
  Copyright By chinadaily.com.cn. All rights reserved