China says no timetable on yuan reform
(Agencies)
Updated: 2005-05-23 14:47

Chinese Vice Premier Wu Yi said on Monday that China remains committed to reforming its currency but no timetable has been set for when the reform will take place.

"We will not reform the yuan until the time is right even if there is external pressure," Wu told a conference in Tokyo, speaking through an interpreter. "As for when to reform the yuan, there is no timetable yet," she said when asked about Beijing's stance on widely awaited reforms in the yuan.

Chinese Vice Premier Wu Yi speaks at the 11th International Conference on 'The Future of Asia' in Tokyo May 23, 2005. [Reuters]

China has kept the yuan's value in a narrow band around 8.28 to the U.S. dollar since the 1997-98 Asian financial crisis.

Critics say the rate gives Chinese exports an unfair competitive advantage, and Beijing is facing increasing pressure from the United States and other countries to allow it to appreciate.

Washington, the most aggressive advocate of a more flexible yuan, has been urging China for two years to modify its pegged currency regime and has raised the threat of potential trade retaliation if it continues to delay.

Wu, who is a member of the Communist Party's policy-making Politburo, said that given China's economic development, Beijing is fully committed to reforming its exchange rate regime regardless of external pressure.

But she stressed that every country has the right to choose it own exchange rate regime as well as appropriate currency levels in line with its national interests.

"We are now preparing for the reform of the yuan's exchange rate system. For such reforms to take place, we need good economic conditions ... and we need to do it under tight control," she added.

Wu said Beijing has been reforming state-owned banks, for instance, to make it easier for authorities to reform the yuan, as well as strengthening the banking sector by injecting capital.

"Also, we need to realize risks involved in reforms of the foreign exchange rate regime."

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