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To: RealMuLan who wrote (36261)	7/18/2003 4:19:12 PM
From: RealMuLan	Respond to of 74559

China backs 'sound' exchange rate system but hints at change By Mure Dickie and James Kynge in Beijing Published: July 18 2003 5:00 \| Last Updated: July 18 2003 11:42 Beijing yesterday responded to warnings from Alan Greenspan, US Federal Reserve chairman, of the dangers of maintaining the Chinese currency's peg to the US dollar by insisting its exchange rate system was sound - but adding that it could be improved. "Faced with the new situation, China will continuously perfect the formation mechanism of the renminbi exchange rate," said Kong Quan, foreign ministry spokesman. Mr Kong's comments appear to reflect plans by the People's Bank of China, the central bank, to respond to pressure for a revaluation by allowing the renminbi greater freedom of movement against the greenback. One government official told the FT recently that Beijing would not bow to international pressure for a revaluation by abandoning the peg but would "adjust the renminbi exchange rate system" by introducing a wider band than the current Rmb8.276-Rmb8.280 to the dollar. news.ft.com