Premier Wen Jiabao said Sunday that the nation will not bow to pressure from other countries to revalue the yuan because they are using the issue as a tool to curb China’s development.
He also cautioned against the possibility of rising inflation in the country next year and said that it’s too early to say that the national economy has fully recovered, although many economists have expressed optimism about the country’s GDP growth and inflation control next year.
“We will absolutely not agree to the various calls pressuring us to appreciate the yuan,” he said during an interview with Xinhua News Agency.
“They are, on the one hand, demanding the yuan’s appreciation and, on the other, imposing a variety of trade protectionist measures, which, in essence, is to retard China’s development.”
Despite widespread acknowledgement that free trade helps the global economy, some developed countries have taken measures to block Chinese exports. On Dec 22, for example, the European Union decided to extend dumping duties on leather footwear from China for another 15 months.
By the end of November, 19 countries and regions had launched 103 trade remedy investigations against Chinese products and both the number of the cases and the money involved hit a record, according to the Ministry of Commerce.
A higher yuan would make China’s exports more expensive and products from developed countries cheaper, but Wen said that maintaining the stability of the yuan’s exchange rate is an important contribution to global financial stability and economic development. He cited the 1997-98 Asian financial crisis, during which Beijing’s decision to keep the yuan’s value unchanged is believed to have anchored regional currencies and economies.
Wen said China will, together with other countries, make more efforts to promote global trade since “no one would develop without flow of trade”.
“We need action now,” he said.
