LexisNexis(TM) Academic - Document
LexisNexis(TM) Academic - Document
Copyright 2005 The Financial Times Limited
Financial Times (London, England)
March 15, 2005 Tuesday
London Edition 1
SECTION: ASIA-PACIFIC; Pg. 7
LENGTH: 401 words
HEADLINE: Wen warns of impact of revaluation on China
BYLINE: By RICHARD MCGREGOR
DATELINE: BEIJING
BODY:
Wen Jiabao, China's premier, yesterday warned countries pressing for a revaluation of the renminbi that they underestimated the impact it would have on Chinese companies and the global economy.
At the close of the National People's Congress, Mr Wen set out conditions that needed to be met before China could move to greater exchange rate flexibility, including financial and economic stability. But any revaluation "could be unexpected", he said.
His comments are consistent with the view that China feels no urgency to revalue. China, which has pegged its currency to the US dollar since the mid-nineties, has faced growing claims that the level of the peg gives Chinese exporters an unfair trade advantage.
The government has long said it would move to a more flexible exchange rate regime, but without giving a timetable.
Mr Wen said the government's aim was to have a "market-based, managed, floating exchange rate" system. "Our goal has been to let market supply and demand determine the exchange rate," he said.
"When we decide on this, we must take into account not only our own companies' interests, but also the impact on the world and neighbouring countries."
Speaking at his annual press conference at the close of the congress, he made it clear China was committed to pursuing policies for high-speed economic growth for the foreseeable future.
"A small economic growth rate won't do because it would make it more difficult for us to create jobs, increase revenue and engage in necessary undertakings for society," he said. "The Chinese economy is like sailing upstream - either it keeps forging ahead or it will fall behind."
The Chinese economy grew 9.5 per cent last year, according to government statistics. But foreign investment banks, using their own measures because of the unreliability of local figures, put growth at 11-12 per cent.
The government's official estimate for growth in 2005 is "about 8 per cent" but it has consistently underestimated increases in output over the past two years.
Mr Wen said controls aimed at choking off credit for investment in the sectors the government considered were growing dangerously fast had achieved "remarkable results".
Although the government would remain vigilant about a resurgence in investment, Mr Wen said the main problems were lower-than-desired food production and transport bottlenecks for coal and electricity. Concern, not obsession, Page 19
LOAD-DATE: March 14, 2005
Copyright 2005 The Financial Times Limited
Financial Times (London, England)
March 15, 2005 Tuesday
London Edition 1
SECTION: ASIA-PACIFIC; Pg. 7
LENGTH: 401 words
HEADLINE: Wen warns of impact of revaluation on China
BYLINE: By RICHARD MCGREGOR
DATELINE: BEIJING
BODY:
Wen Jiabao, China's premier, yesterday warned countries pressing for a revaluation of the renminbi that they underestimated the impact it would have on Chinese companies and the global economy.
At the close of the National People's Congress, Mr Wen set out conditions that needed to be met before China could move to greater exchange rate flexibility, including financial and economic stability. But any revaluation "could be unexpected", he said.
His comments are consistent with the view that China feels no urgency to revalue. China, which has pegged its currency to the US dollar since the mid-nineties, has faced growing claims that the level of the peg gives Chinese exporters an unfair trade advantage.
The government has long said it would move to a more flexible exchange rate regime, but without giving a timetable.
Mr Wen said the government's aim was to have a "market-based, managed, floating exchange rate" system. "Our goal has been to let market supply and demand determine the exchange rate," he said.
"When we decide on this, we must take into account not only our own companies' interests, but also the impact on the world and neighbouring countries."
Speaking at his annual press conference at the close of the congress, he made it clear China was committed to pursuing policies for high-speed economic growth for the foreseeable future.
"A small economic growth rate won't do because it would make it more difficult for us to create jobs, increase revenue and engage in necessary undertakings for society," he said. "The Chinese economy is like sailing upstream - either it keeps forging ahead or it will fall behind."
The Chinese economy grew 9.5 per cent last year, according to government statistics. But foreign investment banks, using their own measures because of the unreliability of local figures, put growth at 11-12 per cent.
The government's official estimate for growth in 2005 is "about 8 per cent" but it has consistently underestimated increases in output over the past two years.
Mr Wen said controls aimed at choking off credit for investment in the sectors the government considered were growing dangerously fast had achieved "remarkable results".
Although the government would remain vigilant about a resurgence in investment, Mr Wen said the main problems were lower-than-desired food production and transport bottlenecks for coal and electricity. Concern, not obsession, Page 19
LOAD-DATE: March 14, 2005
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