Money
Yuan surges to highest in five years
By Xin Zhiming (China Daily)
Updated: 2010-06-26 09:22
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Before China's latest currency policy change that ended the peg to the dollar, which was introduced two years ago to minimize the impact of the global financial crisis, the US had been fiercely criticizing the country's yuan policy.
Washington welcomed China's announcement of de-pegging the yuan from the dollar on June 19, but some US legislators and business interests are still demanding a faster and bigger yuan revaluation.
The central bank set the yuan's central parity rate against the dollar at 6.7896 on Friday, 0.56 percent higher than a week ago, the highest since July 2005, when the country started its yuan appreciation process.
Despite the strong rise in the value of the yuan, analysts said the new yuan reform is not aimed at appreciation, but rather is a market-oriented reform and people should not hope too much for a bold revaluation of the yuan.
"In the long term, it will appreciate, given China's continually expanding economy," said Zhou Shijian, a senior economist at the Center for China-US Relations of Tsinghua University. "But not for now; it cannot be ruled out that the yuan may rise or fall in the short term."
In Beijing, Foreign Ministry spokesman Qin Gang said that a yuan appreciation would not solve the controversy surrounding China's trade surplus with the United States.
"We believe the appreciation of the yuan cannot bring balanced trade or help the US solve its unemployment, over-consumption and low savings problems," he told journalists on Thursday.
"We hope that the US can reflect on the problems of its own economic structure, instead of playing blame games and imposing pressure on others."
AFP contributed to the story