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Yuan flexibility vital for economic balance
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It's been nearly six months since China's central bank announced it would gradually allow the yuan exchange rate to become more flexible.
The move signaled a break from the yuan's 23-month-old peg to the US dollar. However, other countries are pushing for the yuan to appreciate more rapidly.
From 2005, the exchange rate between yuan and dollar has unconsciously entered from the era 8 to era 6. Since June 19th, China's yuan has appreciated about 3 percent against the US dollar.
The appreciation is already considerable, but U.S. lawmakers and manufacturers still say China has gained a trade advantage that costs U.S. jobs and ask for a more quick appreciation of yuan. Facing such situation, an economic expert expressed his opinion.
Tang Min, Former Deputy Sec.-Gen., China Development Research Foundation, said, "According to the China's current economic environment, such rapid appreciation damage to the global economic situation."
During the G20 summit this year, China has called to focus on the most fundamental structural problems of the global economy. Many economists say that the current account imbalance is caused by a structural imbalance in the world economy, rather than the yuans's exchange rate. As for keeping economic balance has almost become a priority of economic development in China even in the world, an expert on international relations has an idea.
Zhou Shijian, Sr. Fellow, Tsinhua University US-relations Center, said, "The decision of increasing the yuan's flexibility made by China's government is a necessary step to realize the reform of the market mechanism. Some may argue that it is because of exterior pressure. But generally speaking, the internal needs are the principle reason."
"It is difficult to justify whether the yuan will appreciate or depreciate in the future since the restarting of yuan exchange rate's reform. The point is to increase the yuan's flexibility in order to adapt the tendency of Chinese economic development.
