Chinese Premier Wen Jiabao, pledged on Tuesday to keep the yuan exchange rate stable and perfect the exchange rate system but reiterated that the country had no plans to re-value its currency.
He also urged an annual gathering of top financial officials to work to accelerate financial reforms and to deepen the overhaul of state-owned banks.
"We will gradually perfect the RMB (yuan) exchange rate formation mechanism and maintain the basic stability of the yuan at a reasonable and balanced level," he was quoted on state television as saying, repeating the well-trodden line that there were no plans for an imminent revaluation.
Big trading partners such as the United States and Japan have said the yuan's peg is too low and gives Chinese goods an unfair advantage on world markets.
But Xinhua news agency said on Tuesday the central bank had no plan to raise the yuan currency exchange rate. A day earlier, officials with the central bank and State Administration of Foreign Exchange dismissed a weekend newspaper report that a "substantial" step to re-value the currency could come as early as next month.
Wen's comments also followed a call over the weekend by the Group of Seven nations for more flexibility in exchange rates, a remark seen primarily aimed at China.
The G7 call for market forces to determine currency values was seen as a thinly veiled reference to China, which has kept the yuan virtually fixed against the dollar for almost a decade, and to Asian countries like Japan that have bought huge volumes of dollars to hold their currencies down.
China has resisted foreign pressure to re-value the yuan, which is pegged in a narrow range around 8.28 to the dollar, criticised abroad as artificially low and making its exports unfairly cheap.
But analysts say Beijing may have been quietly weighing its options, with growing favour for re-pegging the yuan to a trade-weighted basket of currencies to help create flexibility and deflect US criticism.
BANK REFORMS: The government has flagged 2004 as a year of reforms to turn around its debt-laden Big Four state banks - a glaring weak spot in the world's sixth-largest economy.
"First of all, we must deepen state-owned banks reforms, focusing on stock-holding system reform of the Bank of China and the Construction Bank," Wen said at the start of the annual two-day financial meeting.
Central bank chief Zhou Xiaochuan has said the year-end capital injection into Bank of China and China Construction Bank would herald a series of strong banking reforms.
"We should deepen the reforms of other commercial banks and policy banks as well," Wen added.
China's creaky banking sector faces intensifying foreign competition as China opens up the market under World Trade Organisation obligations.
Comments
Comments are closed.