China banker: Currency pressure won't work
MAY. 12 12:21 A.M. ET Foreign pressure on Beijing to step up its currency reforms will backfire and could complicate any changes, a deputy governor of China's central bank said in a recent interview reported by state media on Thursday.
"The Chinese government's reform direction isn't about being carried out under pressure from the outside," Wu Xiaoling said in an interview carried by the Japanese financial newspaper Nihon Keizai Shimbun, excerpts of which were posted on the People's Bank of China Web site.
Predictions that the Chinese yuan might be loosened from its decade-long peg of about 8.28 per U.S. dollar could cause large inflows of speculative money, further complicating Beijing's policymaking, Wu said.
Advertisement
"It is not proper to say that China's (exchange rate) reform will proceed under external pressure," Wu said, referring to a U.S. Senate bill threatening to impose retaliatory tariffs on Chinese products if Beijing does not raise the yuan's value.
"We're working hard on this," Wu added.
The official Xinhua News Agency, which reported Wu's remarks Thursday, said they suggested that China would not bend to U.S. pressure on currency issues.
Critics of Beijing's tightly controlled foreign exchange regime say it benefits Chinese exporters by keeping the yuan artificially cheap.
Wu noted that despite China's chronic trade surplus with the United States, which hit a record $162 billion last year, Beijing runs deficits with other major trading partners, including Japan and South Korea.
"Theoretically, nobody can calculate an accurate exchange rate level," she said.
China's overall trade surplus of $16.6 billion in the first quarter of this year was not good news, Wu said.
"It will bring more trade friction and so increase the pressure for the yuan to appreciate," Wu said.
businessweek.com |
