China pursues gradual reform of RMB rate
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Chinese Premier Wen
Jiabao said Sunday China must uphold the principles of
independent initiative, controllability and gradual progress in
pursuing RMB exchange rate reform.
"By 'independent initiative,' we mean to independently determine
the modality, content and timing of the reform in accordance with
China's needs for reform and development," said the premier when
addressing the opening ceremony of the Sixth ASEM Finance
Ministers' Meeting, held in Tianjin, a port city in north
China.
In the exchange rate reform, the premier said, China should take
account of its possible impact on the country's macro-economic
stability, economic growth and job market, give consideration to
the state of the financial system, the level of financial
regulations, resilience of the enterprises and effect on foreign
trade and keep an eye on the economic and financial performance of
the neighboring countries and regions, and of the world as a
whole.
"By 'controllability,' we mean to properly manage the changes in
RMB exchange rate at the level of macro-regulations. We must push
forward the reform but always stay on top of the challenges, so as
to prevent fluctuations in the financial market and economic
instability."
"By 'gradual progress,' we mean to push forward the reform in a
step-by-step manner. We must take into consideration both the
present needs and the future development and guard against undue
haste."
"In short, we need to continue improving the RMB exchange rate
forming mechanism and develop an exchange rate system that is more
market-oriented and more flexible."
However, the premier said, since this reform involves a wide
range of areas and will have a far-reaching impact, it still
requires a great deal of preparation to help create an enabling
environment for all sides to sustain the possible impacts.
Such a responsible attitude and practice of China will
contribute to the stability and development of not only Chinese
macro-economy but also the economy of the surrounding countries and
the larger world, the premier said.
Stable RMB exchange rate in interests of all
Chinese Premier Wen Jiabao said Sunday that keeping RMB exchange
rate basically stable at a reasonable and balanced level is in the
interests of economic development not only in China but also in
neighboring countries and region as a whole.
Wen said maintaining the RMB exchange rate basically stable at a
reasonable and balanced level also contributes to the world
financial stability and expansion of trade.
"This point was well illustrated during the Asian financial
crisis in 1997, when the stable RMB helped alleviate the pain on
our neighboring countries and regions and contribute to economic
and financial stability and development in Asia and the whole
world," he said at the opening ceremony of the Sixth ASEM Finance
Ministers' Meeting in the northern China port city of Tianjin.
Policy suitable to national conditions
Chinese Premier Wen Jiabao said Sunday that China is entitled to
choose its currency (RMB) exchange rate mechanism and policy
suitable to its own national conditions.
"It is the common understanding in the world that every country
is entitled to choose the exchange rate mechanism and policy
suitable to its own national conditions," said Wen in a keynote
speech at the opening ceremony of the Sixth ASEM Finance Ministers'
Meeting in the northern China port city of Tianjin.
Back in the early 1990s, China set its targets and tasks for the
reform of RMB exchange rate mechanism, which is to gradually
establish a market-based and well-managed floating exchange rate
system so as to keep the RMB exchange rate basically stable at a
reasonable and balanced level, said the premier.
Over the past decade and more, China has done a lot on the
reform of the RMB exchange rate mechanism and made important
progress, he added.
Proposal on Asia-Europe financial cooperation
Chinese Premier Wen Jiabao Sunday put forward a five-point
suggestion to further Asia-Europe financial cooperation at the
opening ceremony of the Sixth ASEM Finance Ministers' Meeting
(FMM).
Wen firstly suggested Asian and European nations strengthen
dialogue and coordination on macro-economic policies, saying it is
of great importance for Asian and European countries to regularly
exchange economic and policy information through increased
dialogue, communication and equal-footed consultation to jointly
deal with risks and challenges facing the world economy.
"To promote sustainable and steady development of the world
economy, we need to pool our efforts and adopt responsible
macro-economic policies to maintain the stability of the major
reserve currencies, curb big fluctuations in oil prices and prevent
the rise of trade protectionism in all forms," he said.
"The Chinese government proposes to establish an ASEM
Contingency Dialogue Mechanism for Emergent Economic and Financial
Events within the framework of the ASEM FMM for the purpose of
safeguarding economic and financial security," he said.
Secondly, Wen urged countries of the two continents to increase
exchanges on development experience.
"We should have in-depth discussions on development paths and
strategies and increase exchanges to share experience in regional
integration and success stories in macro-economic regulations and
restructuring under open conditions," the premier said.
Later this year, China and United Kingdom will co-sponsor a
Fiscal Policy and Public Debts Forum within the framework of the
ASEM FMM.
"All the finance ministers of Asian and European countries and
members of their financial communities are most welcome to take
part in this Forum," Wen said.
Thirdly, Wen said he hoped Asian and European nations would
deepen substantive cooperation in fiscal and financial sector.
Asian and European countries should actively explore and advance
fiscal and financial cooperation between the two continents to
develop the Asian regional bond market and support the role of the
euro in maintaining international financial stability and promoting
development, so as to enhance the international standing of Asia
and Europe in the monetary and financial field.
"We should also give full scope to the positive role of the ASEM
Trust Fund in assisting the underdeveloped members of ASEM intheir
financial reforms," he said.
Fourthly, the Chinese premier suggests Asia and Europe
strengthen technical assistance and financial capacity
building.
He said, "Given the uneven development between Asian and
European countries, we should render greater support to the poor
countries in the region through vigorous technical assistance so as
to promote the realization of UN Millennium Development Goals."
Lastly, Wen suggests Asian and European nations foster an
environment for win-win international economic cooperation.
"We should, through our coordination and cooperation, promote
the international community to pay more attention to the
interestsof the vast number of developing countries by way of
substantially writing off their debts, increasing development aid
and speeding up technology transfer."
"We should also facilitate the reform of the international
financial and trade systems, promote an early conclusion of the WTO
Doha round negotiations and call for innovative thinking in
international development so as to establish a sound new
international economic order," the premier said.
The Sixth ASEM-FMM, themed to "promote closer Asia-Europe
economic and financial cooperation," attracted more than 200
participants from 13 Asian countries, 25 European nations and the
European Commission, and representatives from international
financial institutions such as the World Bank and the International
Monetary Fund.
Enhanced cooperation between Asia, Europe
Chinese Premier Wen Jiabao Sunday urged Asian and European
countries to strengthen cooperation in all areas in a bid to lift
Asia-Europe cooperation to a new high.
"Asia is by far the most dynamic economy in the world while
theEU the world's largest developed economy. Their cooperation to
mutual benefit has truly broad prospects," Wen said in a keynote
speech delivered at the Sixth ASEM Finance Ministers' Meeting
(FMM), which opened here Sunday.
"The founding of ASEM is a strategic choice of Asia and Europe
to step up exchanges and cooperation under the new international
situation," Wen said, adding that since the first ASEM meeting in
1996, Asia and Europe have been keen to conduct political dialogue,
economic cooperation and scientific, technological and cultural
exchanges, which has helped the growth of the new ASEM
comprehensive partnership and contributed significantly to world
peace and common development.
The Chinese premier expressed the belief that the enlarged ASEM,
whose member countries have two fifths of the world's population
and over half of the world's total gross domestic product (GDP),
will play an even greater role in world affairs.
More than 200 representatives from the 39 parties of the ASEM
gathered in the northern China port city to attend the one-day
Sixth ASEM FMM, the first of an enlarged ASEM, which Wen said would
be a good opportunity for participants to explore strategies for
ASEM economic and financial cooperation under the new situation and
to discuss the major issues in the world economy.
Two documents -- a Chairman's Statement and a Tianjin Initiative
on Closer ASEM Economic and Financial Cooperation, are expected to
be adopted at the meeting which focuses on the theme to "promote
closer Asia-Europe economic and financial cooperation."
China's development poses no threat
China's development is, by no means, a threat to any other
countries, Chinese Premier Wen Jiabao said here Sunday at the
opening ceremony of the Sixth ASEM Finance Ministers' Meeting
(FMM).
"China's development is conducive to the stability and
prosperity of our region and peace and development of the whole
world, and will not threaten or exert an adverse impact on any
country," Wen told Asian and European financial officials at the
meeting.
China has achieved sustained and rapid economic growth, markedly
enhanced overall national strength and constantly improved people's
life since its adoption of the reform and opening-up policy, he
said in a keynote speech.
"China's development largely depends on our own efforts, our own
vast domestic market, abandonment labor resources and the
implementation of the reform and opening-up policy."
Over the past two years, he said, China has taken effective
macro-economic measures to address the prominent problems in the
economy and the Chinese economy has been in good shape.
The Chinese government will continue to take measures to further
tackle the existing problems, with a view to achieving long-term,
steady and fast growth of the Chinese economy.
"We are fully confident, capable and resourceful. We can
overcome any difficulty and risk on the road ahead and reach our
determined magnificent goal of social-economic development," he
said.
The Sixth ASEM-FMM, themed to "promote closer Asia-Europe
economic and financial cooperation," attracted more than 200
participants from 13 Asian countries, 25 European nations and the
European Commission, and representatives from international
financial institutions such as the World Bank and the International
Monetary Fund.
(Xinhua News Agency June 26, 2005)
