« Paul Krugman: The K Street Prescription | Main | Milton Friedman: "I Think the Austrian Business-Cycle Theory Has Done the World a Great Deal of Harm" »

Friday, January 20, 2006

''We're Not Manipulating the Yuan''

Ma Delun says the trade balance is not China's fault, it's just the market doing what markets do:

China Central Bank's Ma Denies Manipulation of Yuan (Update1), Bloomberg: People's Bank of China Assistant Governor Ma Delun said the market is determining the yuan's exchange rate, rejecting U.S. criticism that the government keeps the currency artificially weak to spur exports. Ma said currency policy wasn't to blame for the U.S. trade deficit. ''Workers' pay in China is 1/33rd of that of a U.S. worker,'' Ma said ... ''The U.S. has to accept this global reallocation of industries.'' ... ''We're not manipulating the yuan,'' Ma said. ''The U.S. trade deficit is not caused by the yuan. It's easy to explain this to an economist, but those who don't know about finance don't understand this. They should go back to university.'' ...

''The Chinese government would never look as if it bows to international pressures in its currency reform, even if it actually does, because that would make China lose face,'' said Gao ]Shanwen], chief economist at Everbright Securities Co...

''The small appreciation is decided by the market,'' Ma said, when asked about the currency's movement since July 21. ''Market participants have different views than some outsiders.'' .... In August, [Ma] was named executive vice president of the central bank's Shanghai office, which carries out market operations under guidance from Beijing headquarters.

Questioned on what his forecast for the yuan is this year, Ma responded: ''You need to ask the market.''... ''Some people may think the yuan should appreciate rapidly, but, in fact, it may not,'' the central bank's Ma said. ''It's important to let U.S. politicians understand the currency and what the currency's mechanism is,'' he said, without naming the lawmakers concerned. ... Ma described as ''all rumor'' reports that China might switch its reserves out of U.S. dollar assets. ''We're satisfied with our management of foreign currency reserves,'' he said.

    Posted by on Friday, January 20, 2006 at 01:12 AM in China, Economics, International Finance, International Trade | Permalink  TrackBack (0)  Comments (4)

    TrackBack

    TrackBack URL for this entry:
    https://www.typepad.com/services/trackback/6a00d83451b33869e200d8346d6b0e53ef

    Listed below are links to weblogs that reference ''We're Not Manipulating the Yuan'':


    Comments

    Feed You can follow this conversation by subscribing to the comment feed for this post.