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

To: RealMuLan who wrote (4778)	5/6/2005 4:19:09 PM
From: RealMuLan	Read Replies (1) \| Respond to of 6370

China says no great pressure on yuan appreciate 07 May 2005 ISTANBUL: Chinese Vice Finance Minister Li Yong said Yesterday he did not think upward pressure on the yuan was so great and he believed the pressure for the currency to appreciate stemmed from domestic, not external, factors. He also said there was no timeframe for China to adopt a floating currency regime and said establishing market mechanisms and financial sector reform were pre-requisites for floating the yuan, the subject of intense speculation in global markets. "I don't feel that it (upward pressure) is strong. I feel the pressure is not from the outside but from domestic needs," Li told participants at the annual meeting of the Asian Development Bank (ADB). Li repeated Beijing's position that China would take into account the impact of any yuan reform on regional and global economies. China's Finance Minister Jin Renqing on Wednesday said Beijing was determined to reform the yuan currency regime but intense market speculation on the exchange rate made it very difficult for Beijing to move now. Yesterday Li pleaded with speculators to be patient. "I urge them not to do such speculation (on a possible revaluation of the yuan). They need patience," Li said. Advertisement Advertisement On Thursday, the United States and Japan kept up the pressure on China to reform its rigid yuan currency regime. The yuan, or renminbi, is pegged in a narrow band around 8.28 per dollar. As the dollar has broadly weakened over the last three and a half years, the falling yuan has made Chinese exports cheaper. US manufacturers complain that this gives the Chinese an unfair advantage. Li said China shared the concerns of other countries about imbalances which threaten the world economy. He said China would spend part of its massive foreign exchange reserves to support its financial reforms. "China will spend the necessary resources to support reforms," he said, citing China's past decisions to inject capital into three state banks as examples. Li expressed concern about speculative capital flooding into China. "One big concern to me is that too much hot money is flowing into China," he said. But asked if a soft landing was possible, he told Reuters: "That is certainly achievable." Li also said Beijing would continue adjusting its macro-economic policies as it tries to cool its booming economy. "(Our 2005 priority) is to strengthen and improve macro-economic management. We will continue our macro-economic adjustment, which is so important for steady growth," he said. stuff.co.nz