China's move to proceed with the reform of the Renminbi exchange rate will help increase the competitiveness of the country' s exports on the global market, Yao Jian, spokesman of the Ministry of Commerce, told Xinhua Monday.

Yao said the reform might increase pressure on China's export businesses in the short term, as they were likely to face higher material costs. Rising labor costs and the debt crisis in Europe would also affect China's exports, he added.

In the long run, however, export businesses would improve business management and expand the industrial chain to make themselves more competitive internationally, he said.

The People's Bank of China said, over the weekend, that it would continue reforms of the yuan exchange rate regime and increase the flexibility of the exchange rate.

International payments were the most important factor determining exchange rates, Yao said, adding that the improved situation of China's international payments at present, especially the large decline of China's trade surplus, provided a good basis for the reform of the yuan exchange rate.

Yao forecast in mid-June that China's trade surplus would likely noticeably fall this year. In the first five months of 2010, China's trade surplus fell 59.9 percent from one year earlier, to 35.39 billion U.S. dollars.