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Strategies & Market Trends : China Warehouse- More Than Crockery -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (645)	9/2/2003 9:13:54 AM
From: RealMuLan	Read Replies (1) \| Respond to of 6370

China talks tough on currency Marks Treasury Secretary Snow's visit with hard stand on any suggestions to revalue the yuan. September 2, 2003: 7:11 AM EDT BEIJING (Reuters) - China, bristling at calls to revalue the yuan, ruled out any change to its currency peg during a visit by U.S. Treasury Secretary John Snow on Tuesday but offered a token easing of its capital controls. Snow, who landed in Beijing on Tuesday afternoon, is under pressure at home to urge China to revalue the yuan, which is pegged to the dollar, to save jobs at hard-pressed U.S. factories. The International Monetary Fund (IMF) weighed in on Tuesday, saying it was in China's best interests to move towards a more flexible exchange rate system. "Such a move would improve the central bank's ability to control money and credit growth, and also help cushion China's economy from domestic and external shocks," IMF Managing Director Horst Koehler said in a statement. China stood its ground. "There won't be any change in the exchange rate just because someone is visiting China," a spokesman for the People's Bank of China, the central bank, told Reuters. The state-run China Daily newspaper said it did not want the yuan to become an issue in the 2004 U.S. presidential race. "China's currency, unfortunately, is in a position of finding itself involved in the finger-wagging sessions that accompany this essentially American saga," it said in a commentary under the title "Don't meddle with the yuan." And shortly after Snow arrived, Foreign Ministry spokesman Kong Quan told a news conference China would maintain exchange rate stability. "The stable exchange rate of the renminbi is conducive to the economic stability and development of China, Asia and the world," he said. American manufacturers say a cheap yuan, held at around 8.3 to the U.S. dollar, gives Chinese rivals an unfair edge. Snow has said little publicly while in Asia about China's currency but Japanese Finance Minister Masajuro Shiokawa said they had agreed in talks in Tokyo that the market should set the value of the yuan. Snow was due to meet central bank Governor Zhou Xiaochuan and Finance Minister Jin Renqing on Tuesday afternoon. "I think John Snow is wasting his time, because China is not going to revalue its currency because the U.S. wants them to," the Economist Intelligence Unit's chief economist, Robin Bew, told Reuters in Hong Kong. China is worried about the damage a revaluation may cause to export growth that has helped fuel one of the world's fastest-growing economies. It has dug in against the pressure to revalue -- mainly from the United States, Japan and South Korea -- saying jobs and social stability are more important than changing the yuan peg. The minor adjustment to capital controls was unlikely to satisfy U.S. manufacturers, who have targeted China's currency in a debate that is gathering steam ahead of the U.S. election. China had a $103 billion trade surplus with the United States last year. The U.S. Treasury chief travels to Thailand on Wednesday for a meeting of Asia-Pacific finance ministers, where the yuan debate is expected to be a central feature. money.cnn.com