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

To: RealMuLan who wrote (3204)	5/17/2004 1:01:33 AM
From: RealMuLan	Read Replies (1) \| Respond to of 6370

China Won't Raise Rates Before U.S., H.K.'s Tang Says (Update2) May 17 (Bloomberg) -- China won't raise its interest rates until after the U.S. makes the first move because of the pressure that would put on the Chinese currency which is pegged to the U.S. dollar, said Hong Kong Financial Secretary Henry Tang. ``It will be the Federal Reserve leading it,'' said Financial Secretary Henry Tang in an interview with Bloomberg. ``If China were to raise its rates today, then they will be generating more pressure on the yuan itself because of the disparity.'' Asian finance ministers are counting on China to succeed in its bid to cool economic growth to about 7 percent this year from 9.1 percent last year without causing a sharper slowdown. Surging job growth and rising prices for goods and services have fueled speculation the U.S. Federal Reserve will head off inflation by boosting the benchmark lending rates as early as June. China, which has also come under international pressure to allow more flexibility in the yuan, has said improvement in the banking industry is needed before relaxing the peg. The stability of the yuan, which is pegged to the dollar, must be maintained, Finance Minister Jin Renqing said on Saturday, and more study is needed before China moves to a market- based exchange rate. The yuan is fixed in a 0.3 percent band around 8.3 yuan to the U.S. dollar. China is confident it can cool its economy gradually, Jin said. Inflation is at a manageable level and China's policies to cool its economy will take time to work, Jin said. quote.bloomberg.com