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China's reform on the foreign exchange rate of the currency Renminbi is beneficial to the economic development of China, Asia and the world, said a Chinese senior official Friday.
Jin Renqing, Chinese finance minister, made the remarks at a joint press conference made by all the finance ministers and senior finance officials at the end of the 12th APEC (Asia-Pacific Economic Cooperation) Finance Ministers' Meeting at the South Korean southmost island.
Jin pointed out that China already conducted a reform of the foreign exchange system on July 21 this year, when he replied question raised by Xinhua.
The reform made yuan's exchange rate more flexible reflecting more about the relation between supply and demand, Jin introduced.
China raised the value of Renminbi from around 8.28 to 8.11 per US dollar on July 21 and scrapped its peg to the US dollar, shifting to referring to a basket of currencies" to determine the value of its currency.
"China's reform on the foreign exchange rate of the currency Renminbi is not only beneficial to the economic development of China, but also of Asia and the world," said Jin.
"The reform also contributed to the resolving of the imbalance development of the world economy," Jin said.
"Chinese government's goal over the reform of foreign exchange rate system is firm, continual, manageable and active," stressed Jin.
"Our government is working on every reform and will take gradual steps while taking into consideration of stable growth of the Asian economy as well as the global economy," he said.
The Chinese finance minister also made some comments on the mulling reform over levying unified income tax on domestic and overseas-funded firms.
"It is natural for the Chinese government to take such measure catering to the new situation brought about by China's entry into the World Trade Organization (WTO) in 2001," Jin explained to the reporters.
Jin also said the Chinese government is carrying out in-depth research over the new taxation systems, but he underscored such reform will not affect foreign direct investment.
"The overseas-funded firms who have entered Chinese market will be permitted to enjoy preferential policies that they had been enjoyed before we adopt the new taxation systems," said Jin.
"And they also will be granted a period of transition time after we adopt the new taxation systems," promised Jin.
The actual income tax rate has remained at 14 percent for overseas-funded businesses, much lower than the 24 percent for domestic firms, since China formulated the preferential policy for overseas-funded enterprises in mid-1980s in a bid to lure foreign investment.
The 12th APEC FMM Friday concluded its two-day official sessions at Jeju Island earlier Friday.
(Xinhua News Agency September 10, 2005)
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