China rejects calls for free float of renminbi

[ze_dscherman]

t China's top economic official on Tuesday reiterated the country's opposition to floating the renminbi, saying that a stable currency was in the interests both of China and the global economy.


Wen Jiabao, the prime minister, said everyone would lose out from a free-floating renminbi.

"To keep the stable renminbi will not only benefit the stability and development of the economic and financial order in China, but also the economic and financial order of surrounding countries, and fundamentally the international economic and financial order," he said.

SNIP

China has come under mounting pressure to revalue its currency, which many argue is undervalued and gives the country an unfair advantage in world markets. The US bilateral trade deficit with China ballooned to $100bn (€88bn) last year. Chinese exports doubled between 1997 and 2002.

SNIP

Chinese efforts to keep the renminbi in its band has also been convenient for the US in recent months. China's purchases of dollars has helped the US finance it bloated current account deficit and put downward pressure on interest rates.

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On edit: China has about $ 340 bn. reserves, most in Treasuries, and has become second biggest creditor of the U.S. (after Japan).

[Neutrino]

1. Chinese Authorities have recently announced

plans to increase the Budget for value added tax rebates to exporters.
By also accelerating the reimbursement of delayed payments of VAT
rebates of as much as US$30billion, these measures act as a defacto
devaluation of rmb.

[mumon]

2. this may ultimately be GOOD for the US

Chinese hold lots of US debt; they probably won't be inclined to let Smirk invade wherever the f*ck he wants.

[sam sarrha]

3. but we will have to let them invade wherever they want....? Tibet is a

good example of how assimilation through genocide works. nearly 25% of the Tibetan people have been murdered thru execution. forced labor death camps, destruction of housing in winter...starvation. about 1.6 million people have been murdered. a culture so peaceful that they have had no need for a police force for 1,400 years.