PBC adviser dispells yuan pressure
09/20/2010 Source: Global Times
An adviser to China’s central bank said Sunday that unlike Japan in the 1980s, China won’t cave to foreign pressure to let its exchange rate appreciate, a financial news website reported.
Li Daokui’s comments come after US Treasury Secretary Timothy Geithner called for Beijing to address “trade distortions” by letting the yuan strengthen.
“China, as it stands now, is not Japan in 1985, it is not a country that completely relies on external demand,” he said at the China CEO Forum taking place in Beijing, in a speech transcribed on finance.qq.com.
“We will not appreciate the yuan solely because of external pressure.”
Li appeared to refer to the 1985 Plaza Accord, where Japan agreed to let its yen currency appreciate against the dollar.
China vowed more flexibility in its foreign exchange policy in June, but Geithner said Thursday that despite the move, the yuan’s value was “essentially” unchanged in the past two years because of “very substantial” intervention by authorities.
Since June the yuan has appreciated about 1.6 percent against the greenback and gained about 0.7 percent this week ahead of Geithner’s testimony to US Congress.
Li said this kind of pressure won’t abate in the coming decade.
“Protectionism against China and India will continue to increase and pressure on the currency will also continue,” he said.
