The time is not right to reform China's currency regime and pressure on the yuan can be eased by means other than a revaluation, a Chinese researcher said in a commentary published on Saturday. The column by Yi Xianrong, a scholar at the Chinese Academy of Social Sciences, was carried in the state-run China Business Weekly, and comes at a time of growing speculation Beijing could allow the currency, pegged at about 8.28 to the dollar, to rise.
"One can only deduce that the reasons used to urge China to appreciate the renminbi are not solid enough," Yi said in the English-language article.
"The steep rise in foreign exchange reserves and the trade surplus are still putting more pressure on appreciating the yuan, but the pressure can be eased by several other means," he said.
But his article contradicted an analysis by He Fan, a member of the same institute, published in another state-run newspaper on Friday that said an exchange rate adjustment would help the economy and improve China's global standing.
The conflicting views come as China's leaders gather for an annual closed-door economic work meeting that is expected to chart the country's economic course for the coming year.
An article in Wen Wei Po, a Beijing-backed Hong Kong newspaper, said the meeting was unlikely to result in an any sudden changes in the yuan, echoing analysts' views.
"Observers here hold the view this working conference will be unlikely to make any appreciation or devaluation or man-made adjustment, but will further perfect the mechanisms on the renminbi exchange rate," the newspaper said.
"Next year, the State Administration of Foreign Exchange will continue to strengthen its guidance and management of inflows of foreign currency to prevent the impact of short-term capital," it said.
The secretive meeting is expected to conclude on Sunday.
Beijing has pledged to make the yuan more flexible through gradual reforms over time, but has rejected calls for a one-off revaluation.
Analysts have said a more likely scenario would be a slight widening of its narrow trading band or pegging the yuan to a basket of currencies, including the dollar, euro and yen. Countries like the United States have urged China to let the yuan move more freely, saying the current peg to the dollar is too low and makes Chinese exports unfairly cheap.
But Yi's commentary said the real competitive edge for China's exports came from the low cost of labour, not the value of the yuan.
"It is necessary to be prudent and, at any time, refrain from introducing new uncertainties to the market. The exchange rate of renminbi must remain stable," he said.
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