RMB appreciation of 'limited help' to trade rebalance
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The appreciation of a country's currency is of "limited help" to solve global trade imbalance, as China is witnessing narrowing trade surplus with a stable yuan, China's Minister of Commerce Chen Deming said Sunday.
Speaking at the China Development Forum 2010, Chen said the yuan exchange rate is not undervalued, while pressure on yuan appreciation is "irrational" and will bring no good to both sides.
Chen noted that despite that yuan had appreciated by more than 20 percent from 2005 yo 2008, China's trade surplus increased in the three-year period.
By contrast, as China has kept its currency stable since 2009, the country's total trade surplus fell more than 30 percent in 2009 from 2008, and it continued to decline another 50 percent year on year in the first two months this year, he said.
"Personally I think China is likely to see trade deficit in March," Chen said.
China's trade surplus contracted 50.4 percent from a year earlier in the first two months this year to 21.76 billion U.S. dollars, customs data showed.
Chen said the exchange rate issue is something entirely within China's sovereign rights instead of matters that can be discussed between two nations.
"The United States should not politicize economic issues," he added.
Besides, China will not sit back and "turn a blind eye" if there is any sanction after the United States names China as a currency manipulator, he said.
The U.S. Treasury Department is to decide whether to label China as a currency manipulator in a semiannual report to the Congress next month.
China will also respond if the labelling means legal actions under a multilateral legal system, he added.
Chen said it is only "partial" to conclude that imbalances in global trade and payment have caused the global crisis.
The reasons for the world economic imbalance are structural and complicated, including imbalances in the global wealth distribution and the international monetary system, Chen said.
"But the root cause for the imbalance is the widening gap between the developed countries and the developing ones," he said.
Chen warned that rising trade protectionism could hamper the global economic recovery and pose threat of a economic "double-dip".
The China Development Forum 2010 runs from Sunday to Monday, with a theme of "China and the World Economy: Growth, Restructuring and Cooperation".
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