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| China-Japan-Koreas |
| China open to discussing currency at G7 finance ministers meeting |
| 2005-01-27 |
| Edited by yours truly China is open to discussing its currency at the upcoming G7 finance ministers meeting but will not be pressured on any appreciation, central bank governor Zhou Xiaochuan was reported as saying. Zhou acknowledged the growing pressure for change on the yuan but said China has been taking gradual measures to relax its control of the capital markets as it becomes further integrated into the global economy. "We would like to discuss that issue in the context of international cooperation," the China Daily quoted Zhou as saying. "For any country, the exchange rate issue should be decided by the sovereign state," he added. China has repeatedly pledged to free up its dollar-peg over the last several years but has not indicated a timetable or specific measures, only saying that any eventual loosening of the peg will be gradual and stable. snip Bush, speaking at a news conference, said his administration must face up to the "twin deficits," referring to the budget gap and current account deficit, which measures trade and investment flows. But he also said an important factor is China, whose clout in global commerce is growing. "In terms of the trade deficit, it is important for us to make sure ... that countries treat their currencies in market fashion," Bush said. "I've been working with China, in specific, on that issue; secondly, that people knock down their barriers to our goods and services." Washington has for some time been pressing China to adjust or float the yuan, saying the undervalued currency gives Chinese exports an unfair advantage. |
| Posted by:Secret Master |
| #2 Reuters may have slanted its reporting to suit its anti-GWB agenda. However, we cannot ignore the fact that China owns considerable US debt, and because we have twin deficits accumulating, China being part of our trade deficit and our too much spending deficit, there is some truth to China having to weigh its response to GWB's request in light of its being a major creditor rather than merely a major trader. In other words, China will unpeg the yeun from the dollar even though it will hurt its exports because it is concerned about its credit to the USA, about the value of its investment. |
| Posted by: 2xstandard 2005-01-27 1:58:42 PM |
| #1 al-Reuters, of course, played this as evidence that China is abandoning the dollar peg as a show of no confidence in the US economy. |
| Posted by: VAMark 2005-01-27 1:32:28 PM |