Progress being made on rate reform
By Bao Daozu (China Daily)
Updated: 2005-03-15 02:11

China is working on a plan for a more flexible exchange rate of the renminbi but the specific measures may come at an "unexpected" time, Premier Wen Jiabao revealed yesterday.

Speaking on the last day of the annual session of the National People's Congress (NPC), he said in reply to a question: "Work on the exchange rate reform is in progress.

Chinese Premier Wen Jiabao gestures while answering a reporter's question at a press conference in the Great Hall of the People March 14, 2005. [newsphoto]

"Our purpose is to make the exchange rate more responsive to supply and demand in the market," Wen told a news conference yesterday.

He added: "Regarding the timing of the reform and measures to be adopted, maybe they will come around unexpectedly."

During a two-hour press conference, the premier fielded questions from some 700 reporters. He touched upon issues including Sino-foreign relations, economic and rural reforms, and the stock market - all pressing issues discussed during the 10-day NPC annual session.

Wen's remarks on exchange-rate reform come at a time when anticipation over an appreciation in the Chinese currency has seen inflows of speculative capital, making it hard for the central bank to keep the currency exchange rate within its tight trading range. China has also been under pressure from some trading partners to re-value its currency.

But Wen said those urging the immediate revaluation of the renminbi have not given much thought to the problems that would arise.

"China is a responsible country," he said. "When we decide upon the revaluation of our currency, or reforming our exchange rate regime, we must take into consideration not only our domestic interests but also possible impact on neighbouring countries and the world," he added.

Commenting on energy co-operation with Russia, Wen said the two sides had reached consensus on raising Russia's oil exports to China by rail, which is expected to reach 10 million tons this year and 15 million tons next year.

As 2005 marks the 60th anniversary of the victory in the War of Resistance Against Japanese Aggression, Wen said: "It reminded us of untold sufferings of the Chinese people, Asian people and even Japanese people at that time." Wen added he hoped the Japanese Government could grasp the opportunity to promote friendship with China.

"The two nations should make joint efforts to create conditions for high-level visits to improve bilateral relations," he said.

The premier said he would soon visit India. "The world's two most populous nations are friends, not rivals," Wen said, adding the two nations can tap the co-operative potential and find a "fair, reasonable and mutually acceptable plan" to solve their border disputes.

Wen used an ancient Indian poem to convey his goodwill to the Indian people.

The premier said 2005 would be a "year of reform," citing macro control as area where "achievements needed to be consolidated" for stable and rapid economic development.

(China Daily 03/15/2005 page1)

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