Exporters hard hit

Official statistics show the nation's total export growth has declined to 19.2 percent in October from a year earlier.

However, analysts say the real slowdown could be more severe, as the renminbi's appreciation tends to exaggerate the export figures, which are based on dollar value.

"The real export growth is only about 8 percent to 9 percent," said Pei.

Over the past months, the government has introduced a host of measures including raising the rebate of export taxes as well as scrapping the export restrictions on some products.

The nation will further encourage the development of its export sector and strive for a stable export growth, Xie Xuren, the finance minister, wrote in an article published in Qiushi, a Chinese magazine.

The export-oriented manufacturing sector, despite being criticized by some as low value-added, is important for the nation to provide jobs for its massive pool of migrant workers.

Over the past months, there are increasing reports about factory closures in the coastal regions, which have forced the migrant workers to head home to the countryside for a living, if possible.

Although the benefits of a depreciation of the renminbi appear to be obvious, some also cautioned about its risk.

"The cost of the move can outweigh its benefit," said Guo Tianyong, an economist with the Central University of Finance Economics.

"It's doubtful whether a small depreciation could attract more orders. Meanwhile, a sustained depreciation could trigger an outflow of capital, which also harms the nation's aim to increase investment."

Moreover, some also think such a move could trigger a political backlash from the nation's trade partners.

US officials are likely to urge China to continue to allow the renminbi to rise in value against the dollar over the weekend, when the US Secretary of the Treasury Henry Paulson will meet with top Chinese officials during the two-day US and China Strategic Economic Dialogue, according to the Associated Press.

(China Daily December 3, 2008)