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CHINA / National |
Minister: Prudent fiscal policy to continue(Xinhua)
Updated: 2007-10-16 11:19 BEIJING -- Minister of Finance Xie Xuren said here Tuesday China will continue adopting prudent fiscal policy in the foreseeable future and keep the size of deficits and treasury bonds at sound levels. Xie, who is a delegate to the ongoing 17th National Congress of the Communist Party of China (CPC), said that the government will coordinate the fiscal policy with monetary policy, in a drive to strengthen and improve macroeconomic management. With the Scientific Outlook on Development, Xie said, the Ministry of Finance will implement policy incentives to encourage innovative companies and increase state investment in research and development in key national labs. The financial and taxation branches of the government have to build and improve the fiscal and taxation institution which supports a resources-efficient and environment-friendly economy, Xie said. At group discussion by a delegation from the central financial sector to the ongoing 17th National Congress of the Communist Party of China, it is learned that China's currency the RMB has grown more flexible with its central parity rate having gained 10.19 percent accumulatively against US dollar as of September 30. China scrapped its decade-long peg to US dollar in July 2005 and linked it to a basket of currencies. Currently, the yuan is allowed to rise or fall 0.5 percent a day compared with a daily fixing rate against the dollar. The central parity rate on Tuesday is 7.5136 yuan against one US dollar, up slightly from Monday. China insisted that the revaluation of the RMB must be gradual so as to secure the country's stability in terms of economic growth. In a keynote speech to the Party congress on Monday, Hu Jintao said China would improve the RMB exchange rate system and gradually make the yuan convertible under the capital account. But he didn't give a timetable. The RMB is only convertible for now under the current account for trade in goods and services.
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