Economy

A rising yuan not cure to US trade deficit

(Xinhua)
Updated: 2010-09-22 11:36

BEIJING - The appreciation of the Chinese currency would not solve the US trade deficit problem, China Foreign Ministry spokeswoman Jiang Yu said Tuesday.

When answering a question at the regular press briefing, Jiang said the Sino-US trade imbalance was a result of the international division of labor rather than exchange rate fluctuations.

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Jiang Yu pointed out that recently some officials in the US criticized the RMB exchange rate, and suggested ways to push for its appreciation.  "This is unwise and shortsighted," she said. The fluctuation of the RMB would not solve trade imbalance between any particular counties.

She said that China is always concerned about increasing imports from the US, urging the US to make concrete progress in relaxing export controls to China.

The managed floating exchange rate regime is a firm policy that China is pursuing, which was continued following further reforms of the RMB exchange rate regime in June 2010. The yuan has seen increased flexibility since the reform on June 19th.

The yuan has appreciated by 23.5 percent against the US dollar since the reform of the RMB exchange rate regime in 2005.

Jiang said both China and the US should make more efforts to encourage stable economic recovery. As a nation issuing the reserve currency, the US should pursue responsible monetary and fiscal policies to keep major international currencies stable, in an effort to make due contributions to the world economic recovery, she added.