Learn Chinese - Yuan steady despite pressure

?  ?

BIZCHINA / News

Yuan steady despite pressure

By Xin Zhiming (China Daily)
Updated: 2007-08-01 10:15

The yuan remained relatively stable despite anticipated pressure from the
United States while its Treasury Secretary Henry Paulson visits Beijing.

The yuan's central parity rate was 7.5737 against the US dollar
yesterday, up slightly from Monday's 7.5824.

During his visit, Paulson was scheduled to meet top Chinese officials to
discuss issues ranging from trade to the opening up of China's financial
sector and yuan flexibility.

Last week, some US lawmakers managed to pass legislation by the Senate
Finance Committee that would allow firms to appeal for anti-dumping
duties against countries with "fundamentally misaligned" currencies.

Special coverage:
Watch
Related readings:
?Economist urges quicker yuan rise
?US Treasury opposes currency bill
?Survey: RMB revaluation manageable for exporters
?Economists warn of risks of continued yuan appreciation

Paulson has openly expressed opposition to the Senate's stance.

"The Senate bill opens a door for the US to exert pressure on China to
revalue its yuan faster," said Chen Xingdong, chief economist of BNP
Paribas Peregrine Securities.

"The US government is in a dilemma."

Currency dealers said the yuan's relative stability this week is a result
of a technical correction after it surged to close at 7.55 yuan against
the dollar last Wednesday. They said the yuan's movement is likely to
stall and remain stable in the coming days.

The US side has pressed China to revalue the yuan, but the strategy will
not work, Chen said.

"The Paulson visit will not achieve much in this respect," he told China
Daily.

China has held steady the yuan's exchange rate reform will go steadily
but not hastily.

"China has its own tempo in revaluing the yuan," said Zhao Xijun, a
researcher with Renmin University of China.

China's goal remains making the yuan more flexible, but under a
controlled and gradual progress, he said.

The US has demanded that the yuan's revaluation must be faster, but
critics have said this could be disastrous to the Chinese economy.

If the yuan was revalued by a bigger margin, rising costs would become
unaffordable for many sectors, Chen said.

"It will create great uncertainty for the Chinese economy."

(For more biz stories, please visit Industry Updates)

Learn Chinese