BEIJING -- China's currency should stay on the slow appreciation track, an
economist with the nation's top economic planning agency said Friday. The yuan
has risen three times this week.
Chen Dongqi, vice president of the National Development and Reform
Commission's macro-economics research institute, called for "stabilizing
expectations about renminbi (another name for the yuan) appreciation by means of
fine-tuning."
The yuan's official exchange rate picked up on Wednesday, rising by 123 basis
points, followed by a 79-point jump and a smaller 12-point rise on the following
two days. On Friday, it traded at 7.9736 per US dollar, the central bank has
announced.
Rejecting repeated calls from the United States for accelerated appreciation
of yuan, Chen said in an interview with Xinhua that an increase in value of 3 to
4 percent per year is appropriate.
U.S. manufacturers argue the yuan is undervalued by as much as 40 percent,
making Chinese goods cheaper in the United States and American products more
expensive in China and hurting the US job market.
In July last year, the government revalued the yuan by 2 percent against the
U.S. dollar and abandoned its peg to the dollar in favor of a restricted float
against a group of foreign currencies.
The yuan has since risen by 3.7 percent against the US dollar.
"Exchange rate reform has not created instability, because the overall
economy was performing normally. Some economic problems do exist, but they are
not that serious," Chen said.
"The Chinese economy might not function optimally if the yuan appreciates too
fast, but a small rise in the currency is acceptable," he said, saying that a
gradual appreciation in the yuan's value would allow exporters to increase their
foreign earnings.
Speculators betting on a hefty appreciation would be undermined if the
Chinese currency turns out to rise only step by step.
The yuan is only allowed to move in a 0.3 percent band against the greenback
each day.
