CPPCC members call for yuan stability

Chinese political advisors Wednesday called for a stable currency during the annual full session of the country's top advisory body as the <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />United States piled up pressure on yuan appreciation, the Securities Times reported on Mar 4. <?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />

They insisted that an early rise in yuan would not only harm Chinese economy, but also undermine the fragile global recovery.

The renminbi/dollar exchange rate has been largely unchanged since July 2008.

Li Ruogu, a member of the Chinese People's Political Consultative Conference (CPPCC), said that the yuan exchange rate should remain stable.

"China's export outlook remain uncertain and it is too early to predict a full economic recovery," said Li, who is also chairman of the Export-Import Bank of China, one of China's three policy lenders. He emphasized that the US would hurt itself too if it imposes trade barriers to force a rise in yuan.

His view was echoed by CPPCC member Zhang Saie, who said keeping a stable yuan would be beneficial to the recovery of the global economy.

"Chinese exporters would bear the brunt of yuan appreciation," said she, who is also chairman of Hong Kong-based South China Holdings Ltd. "A rise would undermine China's economic growth and would also do no good to other countries."

She directed the blame at the US, saying that a weak dollar has led to yuan depreciation against non-US dollar currencies since early 2009. "The US should avoid any dramatic fluctuations of the US dollar."

Zhang Xiaoji, a member of CPPCC and director of the foreign economic relations department of the Development Research Center under the State Council, said that the focus should be shifted to a deep reform on the exchange rate system, from a simple debate about relations between the Chinese currency and the US dollar. He said a reform was not simply related to the appreciation or deprecation of a currency, but also connected with international relations.

Commerce Minister Chen Deming said on the sidelines of the opening session of the annual CPPCC Wednesday that China will keep the yuan's exchange rate basically steady in 2010.