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China Aims To Balance International Payments By 2010
Beijing, China (AFP) Oct 26, 2005 China aims to balance its international payments, currently heavily in its favor, by 2010, the chief foreign exchange regulator said Wednesday. Hu Xiaolian, the director of the State Administration of Foreign Exchange (SAFE), said in a statement that balancing international payments is one of the major economic development targets set for the next five years. SAFE will improve the managed floating exchange rate system and gradually make the yuan fully convertible under the capital account, she said in the statement. China booked a current account surplus of 68.7 billion dollars at the end of 2004 and a surplus of 110.7 billion dollars under its capital account, as exports boomed and speculative money flowed in betting on yuan appreciation. Beijing has been trying to curb hot money inflows and channel domestic capital out to ease appreciation pressure at home. Hu vowed in the statement to enhance management over short-term capital flows and maintain financial safety. According to the recently issued guidelines, the central government plans to "perfect the managed floating foreign exchange rate regime (and) progressively achieve yuan capital account convertibility." Ha Jiming, an economist at China International Capital Corp, said full capital account liberalization will not happen until the banking sector is in a state where it is able to compete, both domestically and internationally. That this is unlikely until at least two years after the sector is opened up to foreign competition at the end of next year, he argued. "The door is still pretty much closed, there's a long way to go, but gradually releasing controls won't just help reduce pressure on the exchange rate," he said. "The purpose is to increase the efficiency of excess savings allocation in China." Community Email This Article Comment On This Article Related Links SpaceDaily Search SpaceDaily Subscribe To SpaceDaily Express China News from SinoDaily.com
China Wants To Expand Sino-US Military Relations
Beijing (AFP) Jan 10, 2006China is ready to expand its military relations with the United States, Chinese Defense Minister Cao Gangchuan said on Tuesday. |
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