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China pursues gradual reform of RMB rate
(Xinhua)
Updated: 2005-06-26 10:47
Chinese Premier Wen Jiabao said Sunday China must uphold the principles of
independent initiative, controllability and gradual progress in pursuing RMB
exchange rate reform.
China's exchange
rate reform is a 'slow business', central bank head Zhou Xiaochuan said on
May 24, 2005. [AFP] | "By 'independent
initiative,' we mean to independently determine the modality, content and timing
of the reform in accordance with China's needs for reform and development," said
the premier when addressing the opening ceremony of the Sixth ASEM Finance
Ministers' Meeting, held in Tianjin, a port city in North China.
In the exchange rate reform, the premier said, China should take account of
its possible impact on the country's macro-economic stability, economic growth
and job market, give consideration to the state of the financial system, the
level of financial regulations, resilience of the enterprises and effect on
foreign trade and keep an eye on the economic and financial performance of the
neighboring countries and regions, and of the world as a whole.
"By 'controllability,' we mean to properly manage the changes in RMB exchange
rate at the level of macro-regulations. We must push forward the reform but
always stay on top of the challenges, so as to prevent fluctuations in the
financial market and economicinstability."
"By 'gradual progress,' we mean to push forward the reform in a step-by-step
manner. We must take into consideration both the present needs and the future
development and guard against undue haste."
Chinese Premier Wen
Jiabao delivers a keynote speech Sunday, June 26, 2005 at the opening
ceremony of the Sixth Asia- Europe Finance Ministers' Meeting (ASEM FMM)
in Tianjin, North China municipality. ASEM FMM, an important forum under
the framework of the Asia- Europe Meeting, is aimed at implementing
resolutions and principles reached by Asia-Europe summit meetings on
fiscal and financial issues, and improve economic and financial
cooperation among Asian and European nations.
[AP]
| "In short, we need to continue
improving the RMB exchange rate forming mechanism and develop an exchange rate
system that is more market-oriented and more flexible."
However, the premier said, since this reform involves a wide range of areas
and will have a far-reaching impact, it still requires a great deal of
preparation to help create an enabling environment for all sides to sustain the
possible impacts.
Such a responsible attitude and practice of China will contribute to the
stability and development of not only Chinese macro-economy but also the economy
of the surrounding countries and the larger world, the premier said.
Stable RMB exchange rate in interests of all
Chinese Premier Wen Jiabao addresses the opening ceremony of
the Sixth Asia- Europe Finance Ministers' Meeting in Tianjin, June
26. European finance officials said it was up to China to decide when and
how to make its currency more flexible, backing off from the US approach
of pressuring Beijing over the issue.
[AFP] |
Chinese Premier Wen Jiabao said Sunday
that keeping RMB exchange rate basically stable at a reasonable and balanced
level is in the interests of economic development not only in China but also in
neighboring countries and region as a whole.
Wen said maintaining the RMB exchange rate basically stable at a reasonable
and balanced level also contributes to the world financial stability and
expansion of trade.
"This point was well illustrated during the Asian financial crisis in 1997,
when the stable RMB helped alleviate the pain on our neighboring countries and
regions and contribute to economic and financial stability and development in
Asia and the whole world, " he said at the opening ceremony of the Sixth ASEM
Finance Ministers' Meeting in the northern China port city of Tianjin.
Policy suitable to national conditions
Chinese Premier Wen Jiabao addresses the opening ceremony
of the ASEM FMM in Chinese northern Municipality Tian Jin, on June 26,
2005. Wen said China would pursue a gradual reform of RMB.
[Xinhua] |
Chinese Premier Wen Jiabao said
Sunday that China is entitled to choose its currency (RMB) exchange rate
mechanism and policy suitable to its own national conditions.
"It is the common understanding in the world that every country is entitled to
choose the exchange rate mechanism and policy suitable to its own national
conditions," said Wen in a keynote speech at the opening ceremony of the Sixth
ASEM Finance Ministers' Meeting in the northern China port city of Tianjin.
Back in the early 1990s, China set its targets and tasks for the reform of
RMB exchange rate mechanism, which is to gradually establish a market-based and
well-managed floating exchange rate system so as to keep the RMB exchange rate
basically stable at a reasonable and balanced level, said the premier.
Over the past decade and more, China has done a lot on the reform of the RMB
exchange rate mechanism and made important progress, he
added. Proposal on Asia-Europe financial cooperation
Chinese Premier Wen Jiabao Sunday put forward a five-point suggestion to
further Asia-Europe financial cooperation at the opening ceremony of the Sixth
ASEM Finance Ministers' Meeting (FMM).
Wen firstly suggested Asian and European nations strengthen dialogue and
coordination on macro-economic policies, saying it isof great importance for
Asian and European countries to regularly exchange economic and policy
information through increased dialogue, communication and equal-footed
consultation to jointly deal with risks and challenges facing the world economy.
"To promote sustainable and steady development of the world economy, we need
to pool our efforts and adopt responsible macro-economic policies to maintain
the stability of the major reserve currencies, curb big fluctuations in oil
prices and prevent the rise of trade protectionism in all forms," he said.
"The Chinese government proposes to establish an ASEM Contingency Dialogue
Mechanism for Emergent Economic and FinancialEvents within the framework of the
ASEM FMM for the purpose of safeguarding economic and financial security," he
said.
Secondly, Wen urged countries of the two continents to increaseexchanges on
development experience.
"We should have in-depth discussions on development paths and strategies and
increase exchanges to share experience in regional integration and success
stories in macro-economic regulations and restructuring under open conditions,"
the premier said.
Later this year, China and United Kingdom will co-sponsor a Fiscal Policy and
Public Debts Forum within the framework of the ASEM FMM.
"All the finance ministers of Asian and European countries and members of
their financial communities are most welcome to take part in this Forum," Wen
said.
Thirdly, Wen said he hoped Asian and European nations would deepen
substantive cooperation in fiscal and financial sector.
Asian and European countries should actively explore and advance fiscal and
financial cooperation between the two continents to develop the Asian regional
bond market and support the role of the euro in maintaining international
financial stability and promoting development, so as to enhance the
international standing of Asia and Europe in the monetary and financial field.
"We should also give full scope to the positive role of the ASEM Trust Fund
in assisting the underdeveloped members of ASEM intheir financial reforms," he
said.
Fourthly, the Chinese premier suggests Asia and Europe strengthen technical
assistance and financial capacity building.
He said, "Given the uneven development between Asian and European countries,
we should render greater support to the poor countries in the region through
vigorous technical assistance so as to promote the realization of UN Millennium
Development Goals."
Lastly, Wen suggests Asian and European nations foster an environment for
win-win international economic cooperation.
"We should, through our coordination and cooperation, promote the
international community to pay more attention to the interestsof the vast number
of developing countries by way of substantiallywriting off their debts,
increasing development aid and speeding up technology transfer."
"We should also facilitate the reform of the international financial and
trade systems, promote an early conclusion of the WTO Doha round negotiations
and call for innovative thinking in international development so as to establish
a sound new international economic order," the premier said.
The Sixth ASEM-FMM, themed to "promote closer Asia-Europe economic and
financial cooperation," attracted more than 200 participants from 13 Asian
countries, 25 European nations and the European Commission, and representatives
from international financial institutions such as the World Bank and the
International Monetary Fund.
Enhanced cooperation between Asia, Europe
Chinese Premier Wen Jiabao Sunday urged Asian and European countries to
strengthen cooperation in all areas in a bid to lift Asia-Europe cooperation to
a new high.
"Asia is by far the most dynamic economy in the world while theEU the world's
largest developed economy. Their cooperation to mutual benefit has truly broad
prospects," Wen said in a keynote speech delivered at the Sixth ASEM Finance
Ministers' Meeting (FMM), which opened here Sunday.
"The founding of ASEM is a strategic choice of Asia and Europe to step up
exchanges and cooperation under the new international situation," Wen said,
adding that since the first ASEM meeting in 1996, Asia and Europe have been keen
to conduct political dialogue,economic cooperation and scientific, technological
and cultural exchanges, which has helped the growth of the new ASEM
comprehensive partnership and contributed significantly to world peace and
common development.
The Chinese premier expressed the belief that the enlarged ASEM,whose member
countries have two fifths of the world's population and over half of the world's
total gross domestic product (GDP), will play an even greater role in world
affairs.
More than 200 representatives from the 39 parties of the ASEM gathered in the
northern China port city to attend the one-day Sixth ASEM FMM, the first of an
enlarged ASEM, which Wen said would be a good opportunity for participants to
explore strategiesfor ASEM economic and financial cooperation under the new
situation and to discuss the major issues in the world economy.
Two documents -- a Chairman's Statement and a Tianjin Initiative on Closer
ASEM Economic and Financial Cooperation, are expected to be adopted at the
meeting which focuses on the theme to "promote closer Asia-Europe economic and
financial cooperation."
China's development poses no threat
China's development is, by no means, a threat to any other countries, Chinese
Premier Wen Jiabaosaid here Sunday at the opening ceremony of the Sixth ASEM
FinanceMinisters' Meeting (FMM).
"China's development is conducive to the stability and prosperity of our
region and peace and development of the whole world, and will not threaten or
exert an adverse impact on any country," Wen told Asian and European financial
officials at the meeting.
China has achieved sustained and rapid economic growth, markedly enhanced
overall national strength and constantly improved people's life since its
adoption of the reform and opening-up policy, he said in a keynote speech.
"China's development largely depends on our own efforts, our own vast
domestic market, abandonment labor resources and the implementation of the
reform and opening-up policy."
Over the past two years, he said, China has taken effective macro-economic
measures to address the prominent problems in the economy and the Chinese
economy has been in good shape.
The Chinese government will continue to take measures to further tackle the
existing problems, with a view to achieving long-term, steady and fast growth of
the Chinese economy.
"We are fully confident, capable and resourceful. We can overcome any
difficulty and risk on the road ahead and reach our determined magnificent goal
of social-economic development," he said.
The Sixth ASEM-FMM, themed to "promote closer Asia-Europe economic and
financial cooperation," attracted more than 200 participants from 13 Asian
countries, 25 European nations and the European Commission, and representatives
from international financial institutions such as the World Bank and the
International Monetary Fund.
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