China's yuan is undervalued and increased currency flexibility is ``essential'' to make economic growth more stable, said Xie Fuzhan, the statistics bureau head. Xie, a member of the central bank's monetary policy committee, spoke at a university in Beijing today. He wouldn't specify an appropriate level for the currency. European Central Bank President Jean-Claude Trichet and other regional finance chiefs visit Beijing next week to press for stronger gains by the yuan to reduce global trade imbalances. The currency touched a post-revaluation record today, while Xie's comments illustrated pressure in China for faster appreciation to cool the economy and curb stock and property bubbles. ``There has been increasing consensus this year among China's top decision makers that the undervalued yuan is a problem,'' said Wang Qian, an economist at JPMorgan Chase & Co. in Hong Kong. ``People have realized that excess liquidity is a fundamental cause for the asset bubbles they're worried about.'' The yuan has climbed almost 12 percent against the dollar since a peg was scrapped in July 2005. It closed today at 7.4145 after earlier touching 7.4090, the strongest since the end of the fixed exchange rate. http://www.bloomberg.com/apps/news?pid=20601068&sid=a9rliePJB5dY&refer=economy Wow ! I am impressed to hear these words from an Chinese official ! HA, ha, ha
Minor government official it seems. Trial balloon. Note the more important refusal of docking rights at Hong Kong to the US aircraft carrier yesterday. That is much more of an event than some nothing official making a statement that his superiors won't have to honor. VERY dangerous and volatile situation right now in China. Too much risk for me.
Not to be on 1 side or the other. China had a military exercise right around thanksgiving. So, they are confused on what to do. The initial delayed response is No, but they reverse the decision later on. Of course, by then it is too late for Kitty hawk as it already set sail to Japan instead. Anyway, bad communication on both sides.
Undervalued yuan is a problem? I guess the Chinese should inflated the yuan just the Fed inflated the dollar.
How do you think their economy rises so fast in GDP. They sell a lot of goods from the nation to other countries for cheap prices. This will probably last a good aamount of time as they have large work force. Regardless, eventually their manufacturing prices will sore as well. But that will be in let's say 50+ years. As long as US and China dont nuke each other that is.:eek:
This is just another chapter in a "cat & mouse" game between the Chinese military and the US military which has been going on for some time and will continue well into the future. Nothing to get too worried about, IMO. Just China saying "We aren't going to sit back and just give you free reign over the entire Pacific".