APEC ministers say China may free yuan from dollar
APEC ministers say China may free yuan from dollar
Agence France-Presse, Santiago
APEC finance ministers on Friday ended a two-day meeting here during which they got a concession from China that it might break the link between its currency, the yuan, and the U.S. dollar.
The meeting of Asia-Pacific Economic Cooperation forum (APEC) officials ended in the Chilean capital with a statement by the 21 ministers calling for currency deregulation that particularly targeted the yuan's much-criticized monetary peg to the dollar.
The yuan has been fixed at 8.28 to the dollar for the past 10 years. With the Chinese economy so strong, this has given Chinese exporters a major advantage on world markets.
Critics, especially in the United States, say this has led to unfair trade inbalances in China's favor.
"Ministers welcome steps being taken at the regional and national levels to develop capital markets and strengthen banking systems, which would over time facilitate freer and more stable capital flows and the choice to move to an exchange rate regime with greater flexibility, in some economies, if they deem appropriate," said the statement.
"I was particularly pleased that support for the move to more flexible currency regimes was expressed," U.S. Treasury Under Secretary John Taylor said.
At their meeting last year in Thailand, APEC finance ministers were unable to come up with an agreed formula to criticize fixed currency regimes used by China and other countries in the region.
The finance ministers in their closing statement Friday cited the "growing importance" of money sent home by immigrant workers as "a steady source of financial flows that can benefit emerging markets."
They called for "continued work on analyzing and reducing the institutional and regulatory impediments to remittance flows."
And they applauded the "strengthening" rate of growth in Asia- Pacific economies and the "continued favorable outlook for 2005, notwithstanding the risks associated with high oil prices.
"We stress the important fact that investment and trade are the leading factors behind the global economic recovery," said the statement.
"In our view, both factors are crucial for stronger and broader based growth and for spreading the benefits of globalization."
The ministers set their next meeting for September 2005 in Jeju, South Korea.