Yuan is at appropriate level: Premiere
Yuan is at appropriate level: Premiere
NUSA DUA, Indonesia: China will not let its currency float freely until further financial reforms are in place, Premier Wen Jiabao said on Tuesday.
"To keep the renminbi (yuan) stable at an appropriate and balanced level is conducive to the economic stability and development not only of China but also of the region and the world at large," Wen told a business conference on the sidelines of a regional summit here in Bali.
The U.S. administration is turning up the heat on China to abandon the yuan-dollar peg, which it blames for shutting out U.S. exports and destroying American jobs.
Wen said, however, that Chinese exports make up just five percent of the world's total and Chinese products were competitive because of "our rich labor resources."
More than half China's exports are made by companies which have foreign investment, he added.
Hard-hit U.S. manufacturers complain the yuan is vastly undervalued at a pegged rate of 8.28 to the dollar, making U.S. goods too expensive for Chinese markets and Chinese exports cheap in U.S. markets.
The U.S. trade deficit with China grew 13 percent in July from the previous month to US$11.3 billion. The U.S. deficit with China last year was a staggering $103 billion.
Treasury Secretary John Snow failed to convince China to break the yuan-dollar peg when he visited Beijing last month.
During Snow's visit, the Chinese said they would move to a flexible exchange rate as they steadily reformed the economy.
"The Chinese government has all along taken a prudent and responsible approach to the exchange rate of the renminbi. The current unitary and managed floating exchange rate regime based on market demand and supply is in line with China's reality," Wen said.
"It also shows that China has a high sense of responsibility towards the international community.
"In the cause of further financial reform, China will seek an appropriate renminbi exchange rate regime and improve the currency regime according to its economic development level, economic situation and balance of international payments," Wen said. --AFP