Commerce Minister Chen Deming said a halt to the yuan’s appreciation since mid-2008 was part of a panoply of pro-growth policies to prop up the economy during the global credit crunch.
China has effectively re-pegged its exchange rate at around 6.83 yuan per dollar since mid-2008 to help its exporters during the global financial crisis and is under intense pressure from the United States and Europe to abandon the peg.
“The movement and degree of stability in the yuan in times of crisis ought to be different from when there is no crisis,” he said. But he added: “The direction of yuan reform will be gradual and controlled.”
Central bank governor Zhou Xiaochuan, speaking on Saturday, also stressed the need for policymakers to proceed with caution. But Zhou broke new ground by stating that exiting the stimulus would sooner or later spell the end of the “special yuan policy” adopted to counter the financial crisis. “This is the most explicit comment on the renminbi’s exit from current de-facto peg made publicly by top Chinese policymakers so far,” HSBC’s chief China economist, Qu Hongbin, said in a note to clients.
