China's currency strengthened to its highest level against the US dollar yesterday since its July 21 revaluation. The central parity rate for the dollar was 8.0472 yuan - less than 8.05 yuan for the first time. The Chinese currency has gained an accumulated 2.77 per cent against the dollar from its before-revaluation value. The United States argues that the yuan is artificially low, giving Chinese exporters an unfair advantage, contributing to US trade deficits and hurting US labor markets. China has said it places priority on promoting balanced international payments this year.China's trade surplus came to US$100 billion in 2005 amid increasing trade disputes. The country's foreign exchange reserves surged to US$818.9 billion by the end of last year, second only to Japan. A floating yuan is not simply one that will appreciate, but the prevailing view among industry watchers is that the yuan will strengthen gradually in 2006.
(Source: China Daily 2006-2-14) |
