Senior financial officials at the Boao Forum for Asia reacted
yesterday to reemerging calls from the US for China to revalue its
currency, warning against viewing the issue as one that concerns US
interests alone and ignoring the more complex realities
involved.
Wei Benhua, deputy director of the State Administration of
Foreign Exchange (SAFE), said at a panel discussion that, though
China would take into account the impact a revaluation would have
on its neighbors should it decide to proceed, it sees its domestic
development as the most important aspect in deciding foreign
exchange policy.
In comments clearly directed at a US Congress proposal to take
punitive measures against a perceived undervalued renminbi, he
added that China does not "pay attention solely to the trade
deficit of certain countries."
Wei said the US trade deficit was fundamentally the result of
its own flawed economic policy, and China's trade surplus should be
seen from a multilateral perspective, not simply from one of
bilateral trade.
"Don't forget China has a deficit with Japan, some ASEAN
countries, and a number of European countries. We need to consider
the issue in a worldwide context," he said.
Wei said he had discussed the issue with US financial officials
recently, telling them: "This trade deficit is your problem. You
need to put your own house in order before blaming your
neighbor."
Roberto de Ocampo, president of the Asian Institute of
Management and the Philippines' former secretary of finance,
agreed, saying that a flexible foreign exchange rate system is
generally a good thing, but "one does not do it for the wrong
reason."
He said many of China's exports were partly processed in other
parts of Asia, though the final products were assembled in
China.
"Unfortunately, this particular relationship among countries in
Asia is not appreciated by those pressuring for a revaluation of
the Chinese currency, to the point that even now there are
discussions in the US Congress for protectionist measures in the
form of legislation involving tariffs and so forth directed at
China.
"That is the wrong solution to a misread problem," he said, and
China should continue to strengthen its financial sector before
making significant moves in its foreign exchange management, "not
start from a conclusion about its exchange rate and work from there
to the financial sector. It should be the other way around."
Khempheng Pholsena, vice-president of the Asian Development
Bank, said she had every confidence in China's ability to make a
decision on foreign exchange system reform.
"When and how much is up to the People's Republic of China," she
said.
(China Daily April 25, 2005)