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

To: RealMuLan who wrote (2208)	12/22/2003 1:49:52 PM
From: RealMuLan	Read Replies (1) \| Respond to of 6370

China is considering tying the yuan to a group of foreign currencies and severing its link to the US dollar, the state press reports. US officials have repeatedly said the currency peg causes problems for the US economy by making sure the yuan stays artificially low. With the dollar steadily sliding, China has resisted pressure to drop the peg. But now, the China Business Post says, officials in Beijing are looking at the pros and cons of a change. As is customary in Chinese state papers, The Business Post - published by the government's Stock Exchange Executive Council - did not identify its sources in the central bank. Nor did it give any timescale for such a move away from the US$8.28 fixed value of the yuan, or identify possible alternatives to the dollar - although prime candidates would include the euro and the yen. Chinese officials have been hinting at a possible alteration in the status of the yuan for some time, in the face of the vociferous comments emanating from the US. But even if the plan does come to fruition, it may not satisfy the vociferous critics in Congress and the White House, who say the trade deficit - approaching $120bn this year - is hurting US jobs. The White House wants the yuan to float freely, something China will not allow as long as it faces its own severe unemployment problems. A banking system still weighed down by bad debts made for political reasons to state-owned firms is also considered too vulnerable to expose to a floating currency. news.bbc.co.uk