Monday, June 27, 2005
TIANJIN, China , June 26 -- Chinese Premier Wen Jiabao on Sunday rejected foreign pressure for an immediate shift in the nation's currency regime, saying Beijing would set its own timing for reform and warning against what he called undue haste.
In a speech before Asian and European finance ministers, Wen said China would "independently determine the modality, timing and content of reforms."
He was speaking a day after Japanese Finance Minister Sadakazu Tanigaki said it would be in China's interest to move quickly toward a more flexible exchange rate system.
China's currency regime keeps the yuan's value fixed in a close range at about 8.28 to the U.S. dollar.
U.S. manufacturers contend that China's fixed currency system has undervalued the yuan by as much as 40 percent, making Chinese products cheaper in the domestic market and American goods more expensive in China.
The Bush administration has been pressing Beijing to change its system as the U.S. trade deficit with China swelled to $161.9 billion last year, the highest ever with a single country.
Some U.S. lawmakers want to impose hefty 27.5 percent tariffs on Chinese goods flowing into the United States if Beijing does not move to a more flexible currency system.
Wen reiterated that China's long-term goal remains what he called a "market-based, well-managed and floating exchange rate system." The goal of that system would be to keep the exchange rate "stable at a reasonable and balanced level."
Wen said any currency reform would have to take into account the implications for neighboring countries and foreign trade.
It "still requires a great deal of preparation for all sides to sustain the possible impacts," he said.
Wen made his remarks during a speech at the Sixth Asia-Europe Finance Ministers Meeting.