China has refuted recent United States criticism about its
exchange rate policy, reiterating its principles of independence
and responsibility in handling the issue.?
"The exchange rate system and policy are a country's internal
affair and no other country has the right to interfere," a
spokesman for the State Administration of Foreign Exchange (SAFE)
said yesterday.?
"On this issue, China has always been independent and highly
responsible, on which the international community has long
agreed."?
Speculation that the exchange rate of the Chinese currency,
known as the renminbi or yuan, would appreciate under foreign
pressure subsided after US Treasury Secretary John Snow's visit to
Beijing earlier this month. He came to press the Chinese government
to revalue the currency.?
But US Commerce Secretary Donald L. Evans soon stepped up
criticism, accusing the country of backsliding on the promises to
ease restrictions on foreign companies, dismantle trade barriers
and clamp down on software piracy.
The SAFE spokesman reiterated that China will continue to
maintain the basic stability of the renminbi's exchange rate, which
he said has not only helped promote China's reform and opening-up
and stimulated domestic demand, but also contributed to the fight
against the Asian financial crisis.?
"It's proven that maintaining the basic stability of the
renminbi's exchange rate benefits not only China, but also Asia and
the world," he said.
US manufacturers complain that China has kept its exports
artificially cheap by keeping the yuan undervalued against the
dollar, resulting in losses of US manufacturing jobs. In Congress,
lawmakers are pushing for legislation that would impose import
tariffs on Chinese products comparable to the amount they claim
China's currency is undervalued.?
"Any form of trade protectionism is unfair and a breach of World
Trade Organization rules," the SAFE spokesman said.?
"One should not turn the exchange rate issue into an
international political issue and use it as an excuse for trade
protectionism."?
He said the employment problems in developed countries are
unrelated to China's exchange rate policy. "Every country has its
own structural adjustment, employment and reemployment problems,"
the spokesman said.??
"From 1998 to 2002, China's total secondary industry employment
decreased by 8.2 million, but we never blamed any other
country."?
He noted that the main reason for China's trade and capital
account surpluses is globalization - especially the transfer of
production by many multinationals to the Chinese market - in
addition to its narrowing of the renminbi's floating range in 1997
as part of efforts to deal with the financial crisis.?
"We have never purposefully pursued a sizable surplus on the
international balance of payments," the spokesman said.?
China's foreign trade surplus is declining. Its total trade
surplus fell by 66.5 percent on a year-on-year basis to US$4.5
billion in the first half of the year, while its trade deficit with
Japan more than tripled to US$6.7 billion.?
(China Daily September 23, 2003)