By Han Lei (chinadaily.com.cn)
Updated: 2008-01-02 11:17

The Chinese yuan rose 50 basis points to break the 7.30 mark against the US dollar on the first trading day in 2008, paving the way for a steady appreciation.

Before trading started on Wednesday, the People's Bank of China, the central bank, set the central parity rate at a record 7.2996 against the greenback, according to the China Foreign Exchange Trading System.

The new midpoint marked a rise of more than 10 percent in the yuan value since China ended its peg to the US currency and revalued the yuan by 2.1 percent in July, 2005.

The PBOC allows a trading band of 0.5 percent on either side of the central parity rate each day.

Pressure on a faster appreciation is building up as China's trade surplus is expected to hit US$250 to 300 billion in 2007, prompting accusations that China is keeping the yuan artificially low to give its exporters an unfair advantage.

China has said it is not actively seeking a trade surplus and currency appreciation is not a panacea.