The Best of Chinese Commentators

The course of China's exchange rate system

  • Published 08 Apr 2010

China's scholars seem agreed that Beijing is likely to avoid any significant appreciation of its currency this year, but what exchange rate system is it going to adopt down the line?

China is expected to report a trade deficit in March, the first time since April 2004, so it makes no sense to push China to appreciate the renminbi when it is clearly undervalued, said Chen Jian, vice-minister of Ministry of Commerce. Without clear signs of a complete economic recovery, to appreciate the currency would be disastrous, added Wu Nianlu, professor of the postgraduate school of the People's Bank of China (PBoC), central bank. And in any case, if China is to let the renminbi appreciate, it should do so because of the country's own policy considerations, not because of global pressure, said Li Daokui, a newly appointed member of the Monetary Policy Committee of the PBoC.

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