Top Banker: Forex policy in good shape
(China Daily)
Updated: 2006-01-27 06:39

China's foreign exchange policy is in a good position and requires no changes, People's Bank of China Governor Zhou Xiaochuan said Thursday.

Zhou Xiaochun, governor of People's Bank of China, the central bank. [China Daily/file]

Speaking in a session at the World Economic Forum's annual meeting in Davos, Switzerland, Zhou said the country's change from a fixed exchange rate against the US dollar to a managed float linked to a basket of 20 currencies has introduced a great deal of flexibility.

But Zhou said China still faced pressure from the international community to let the yuan appreciate, though it has risen roughly 2.5 per cent in value against the US dollar since the change.

"The floating band now is OK ... but it is not fully used," Zhou said.

He declined to describe the details of the currency basket China uses, but said the US dollar accounts for "much less than 50 per cent."

Zhou said he expects China's economy to continue to grow strongly this year. He expects gross domestic product growth to be between 8 per cent and 9 per cent. China's economy grew 9.9 per cent in 2005.

Mutual Benefits

On Wednesday, Vice-Premier Zeng Peiyan called for more economic co-operation between China and the rest of the world.

"China cannot achieve development in isolation of the rest of the world, and the world needs China for development," Zeng said in a special address to the opening session of the World Economic Forum annual meeting.

He said China had benefited considerably from the useful assistance of foreign countries since its reform and opening-up in the late 1970s.

"At the same time, China also made contributions to the development of the world," he said.

Zeng also announced in the address that the World Economic Forum will establish a representative office in Beijing. It will be the first office of its kind opened by the forum outside Switzerland.

Created in 1971 and based in Geneva, the forum describes itself as a global community of business, political, intellectual and other leaders committed to improving the state of the world. This year's annual meeting attracted about 2,340 participants, including government leaders and CEOs of big companies.