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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (15974)	11/16/2004 5:54:16 PM
From: RealMuLan	Read Replies (1) \| Respond to of 116555

China to stand firm on yuan-dollar peg AFP[ TUESDAY, NOVEMBER 16, 2004 09:29:17 AM] BEIJING: China will loom large over an Asia-Pacific summit in Chile, with the United States hoping that Beijing will loosen a fixed yuan-dollar link and cool, but not freeze, its red-hot economy. President Hu Jintao will likely reiterate to his Apec partners China's longstanding goal of making its currency fully convertible when they meet in Santiago this weekend. But he is unlikely to set a timetable or detail plans to loosen the peg, citing stability in China's markets as a top priority, diplomats and officials said. They said Hu will also trumpet efforts to cool down an overheated economy to an estimated, and highly enviable, 9.25 per cent growth rate in 2004, while restating the importance of stable domestic and global markets for China to maintain sustainable growth. "China's foreign trade will amount to about $1.1 trillion this year, while the trade imbalance is estimated at less than $10 billion, which is insignificant," vice finance minister Lou Jiwei said last week. "Therefore, China has no need to readjust its forex rate," Lou said in an apparent effort to set the stage for Hu before the Asia-Pacific Economic Cooperation forum summit. The yuan has been pegged in a narrow margin around 8.28 to the dollar for nearly a decade, with many economists expecting China gradually to loosen the peg soon but not to abandon it. Critics, especially the United States, maintain the currency is undervalued and gives China an unfair trade advantage. China has nimbly sidestepped international calls to reform its forex regime since they began in earnest over a year ago, by repeatedly proclaiming its intention to do so. economictimes.indiatimes.com