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IMF urges China to ease controls

IMF managing director Dominique Strauss-Kahn said yesterday he was urging China to ease exchange rate controls to help address global financial imbalances and the country's own economic challenges.

Strauss-Kahn said slower US economic growth should affect China, but the IMF still expects the Chinese economy to expand about 10 percent this year.

Strauss-Kahn met in Beijing with Chinese Premier Wen Jiabao (溫家寶) and China's central bank governor.

"What I am working at is trying to explain to Chinese authorities ... that it's in their own interests to have more flexible exchange rates," he said.

This would "help to address both China's economic challenges and global imbalances," he said.

Beijing's trading partners complain that the yuan is kept undervalued, giving an unfair price advantage to Chinese exporters, as well as adding to the country's swollen trade surplus.

The multibillion-dollar influx of export revenues is straining the central bank's ability to contain pressure for prices to rise.

The IMF also said yesterday that it would sign an agreement with Beijing to expand their cooperation in promoting development efforts in low-income countries.

China has been expanding such cooperation with the IMF and other international bodies.
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