China intends to maintain the “basic stability” of its currency’s exchange rate while the nation’s economy shows “positive signs” of recovery, Chinese Vice Finance Minister Li Yong (李勇) said.
The government will continue policies to restore growth following the economy’s 6.1 percent expansion in the first quarter, as well as increases in investment and consumption, Li said at an Asian Development Bank meeting in Bali yesterday.
“We have seen some positive signs from the indicators issued for the first quarter,” Li said. “We will continue this process and try to bring back growth and also pay attention to the social safety net.”
China expanded in the first quarter at the slowest pace since at least 1999. Still, manufacturing rose for a second month last month, indicating that a 4 trillion yuan (US$586 billion) government stimulus package is succeeding in stoking a recovery in the world’s third-biggest economy.
China is maintaining the “basic stability of the exchange rate” for the yuan, Li said, without elaborating. The yuan rose 0.16 percent last month, its best month this year, following a 0.09 percent advance in March.
China allows its currency to trade by a limit of 0.5 percent against the dollar, on either side of the so-called central parity rate.
To recover from the global recession, Asian governments need to adopt “effective” fiscal and monetary policies that will restore confidence and attract investment, Li said.
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