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RMB exchange rate issue overstated
[ 2005-05-18 09:42:51] | |
The importance of the exchange rate of the Renminbi (RMB), the Chinese
currency, has largely been overstated, said Kevan Watts, chairman of Merrill
Lynch International Inc., Tuesday.
Watts and some other
internationally-renowned experts made comments on the issue of the RMB exchange
rate when addressing Understanding China's Capital Markets, a general session of
the 2005 Beijing Fortune Forum.
Many speakers at the forum held
that the current pressure from the United States on China to adjust the exchange
rate of the RMB is more of a political matter than an economic one.
Economically, it's hard to say to what extent a revaluation of the RMB would
help the United States cut its trade and fiscal deficits.
Stuart
T. Gulliver, chief executive of corporate, investment banking and markets of
HSBC, said that the US trade with China represents only 10 percent of its total
trade. If China was to revaluate its currency, hypothetically by 25 percent, it
would only improve the US dollar on a trade-weighted basis by about 2.5 percent
-- not enough to solve the US trade problem.
He said that the
timing for changing the currency exchange system should be when the Chinese
authorities feel it's right to make that decision. It should be carefully sought
out and done in a very measured way.
When asked by the press about
the danger for China to adjust its exchange rate, Gulliver said that the danger
would be that any straightforward change against the US dollar would not be seen
as enough by the market, and would bring in renewed speculation.
(Xinhua) |
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English
