At the end of the 17th session of the Joint Economic Committee with the US in Beijing yesterday, China affirmed its intention to enhance the flexibility of and role of market forces in its currency exchange rate mechanism.
Both countries agreed in a joint statement that exchange rate policy was a sovereign decision, but could have a global impact, and that excess volatility and disorderly movements in exchange rates were undesirable for economic growth.
US Secretary of the Treasury John Snow said at a press conference earlier in the day that he was encouraged by China's progress in reforming its exchange rate regime and developing its financial markets to aid economic growth.
But he also said it would take time for China to prepare for further reforms, including building necessary financial infrastructure, telling reporters: "We recognize that's going to take some time. China is clearly taking steps to put those mechanisms in place."
He also called proposed US legislation on penalizing China over the currency issue "ill-conceived."
According to the joint statement, China reaffirmed its commitment to further financial sector reform by opening up to competition, strengthening supervision and risk management, improving corporate governance and continuing progress in the corporatization and listing of state-owned enterprises.
China and the US agreed to enhance cooperation in this, the statement said.
China said the US should support the full range of Chinese Multilateral Development Bank projects and expressed its intention to join the Inter-American Development Bank (IADB).
The US side said it supported China's endeavor to join the IADB, and the statement said bilateral consultations on this matter would continue.
China and the US reiterated the importance of identifying and combating terrorist financing and money laundering, and agreed to take necessary steps to prevent abuse of financial systems within their jurisdictions.
They also reiterated their support for the successful conclusion of the Doha Development Round of WTO negotiations.
(China Daily October 18, 2005)
