2010-07-19 15:35

China's consumer price index rose 2.9 percent year on year in June, down slightly from the 3.1 percent rise in May, which had exceeded the 3 percent full-year target ceiling the government set in March, according to official data released last week.

For the medium to long term, according to Zhang, a more flexible yuan can further boost China's production efficiency, economic restructuring and the growth of outbound investment, which was especially important in times of rising trade protectionism.

Wen Bin, a senior analyst with the Bank of China, said a stronger yuan could enhance the spending power of Chinese consumers, which would in turn benefit China's surrounding economies in east and southeast Asia, "as China imports more from these countries than it exports."

Cheng Enfu, chairman of the World Association of Political Economy, also told Xinhua that the new exchange rate regime would also benefit the global economic recovery by filling the trade gap between China and the United States and reducing the possibility of future trade wars.

"This could bring the world economy back to a healthy track and push forward adjustments of the global economic structure," Cheng said.