US Federal Reserve Chairman Alan Greenspan yesterday urged China to ease tight controls on its exchange rate for the sake of its own financial health, but China's top central banker said the country's fragile financial system needs more time to prepare.
"I've said on numerous occasions I think it is to the advantage of China to allow a little more flexibility in the exchange rate," Greenspan told a conference of central bankers in Beijing, speaking via satellite video link from Washington.
"It is something that I am certain they will take on reasonably soon," he said during a panel with key central bank officials from China, Japan and Europe.
While Greenspan expects China to move "soon," China's central bank chief suggested there was more work to be done first.
"China needs to prepare -- first, to reform financial institutions to fit into the future environment of foreign exchange flexibility," said Zhou Xiaochuan (
The exchange rate "is an economic issue, not a political issue," Zhou said.
Beijing also worries that a sudden shift in the yuan could affect unemployment, economic growth and consumer confidence, Zhou said.
He didn't give any indication when the communist government might allow a freely traded yuan.
Currency traders expect Chinese authorities to introduce more flexibility to the yuan's exchange rate within the year, possibly by widening the band in which it is allowed to trade versus the US dollar. Should that happen, the yuan is widely expected to appreciate against the US dollar, lifting with it the yen and other Asian currencies against the dollar.
"Basically, China is ready," said Frank Gong, managing director at J.P. Morgan Chase and Co in Hong Kong.
But, China wants "to depoliticize the issue first, then it will move," Gong said, predicting a wider trading band within the next few months.
To maintain its currency controls, China has to buy large quantities of US dollars -- an arrangement that Greenspan said "cannot go on indefinitely."
A magnitude 7.8 earthquake struck off the southern coast of Mindanao in the Philippines at 7:38am today, prompting the US Tsunami Warning System to issue an alert for neighboring countries, including Taiwan. The system issued a purple alert indicating a "tsunami threat." The potential threat zone includes Taiwan, the Philippines, Papua New Guinea, Yap and Palau. Philippine authorities were assessing the damage from the quake, with the office of civil defense seeking to verifying initial reports that 15 people had been killed and 129 injured in the region, mostly from falling debris. Arlene Hollero, disaster chief of Maasim town in the Philippines' Sarangani Province,
‘GRAY ZONE’ PRESSURE: Beijing’s activities are intended to create the deceitful impression that China has jurisdiction over the area around Taiwan, the CGA said Taiwan’s rights over its territorial waters and exclusive economic zone must not be violated by any country, the Mainland Affairs Council said yesterday, adding that it will not accept any unprovoked actions. The council issued the remarks in response to the China Coast Guard conducting maritime enforcement drills near eastern Taiwan and claiming to fully exercise China’s maritime administrative law enforcement authority. The Coast Guard Administration (CGA) has been closely monitoring the situation and is taking concrete steps to defend the nation’s sovereignty and secure its waters, the council said. China has no sovereign rights over the waters off eastern
RESILIENCE: Taiwan plays a key role in semiconductors, energy, information infrastructure and advanced manufacturing, AIT Director Raymond Greene said Taiwan’s continued investment in deterrence and resilience remains vital, especially in uncrewed systems and other emerging technologies, American Institute in Taiwan (AIT) Director Raymond Greene said yesterday. Greene made the remarks at the annual National Strategic Summit on Supply Chain Resilience held by the Research Institute for Democracy, Society and Emerging Technology (DSET), a government-backed think tank. As Taiwan last year became the US’ fourth-largest trading partner and supply chain security is becoming more important, cooperation in emerging technologies continues to deepen between the two countries, he said. The US is committed to accelerating innovation, building key infrastructure, strengthening cooperation
The National Chungshan Institute of Science and Technology yesterday showcased its locally developed variants of the Vision 60 robotic patrol dog, which it plans to deploy on the nation’s outlying territories in the South China Sea. The variants were produced under the Joint Lab project — created by the institute and domestic companies — and assembled with domestically produced motors, lenses and artificial intelligence (AI) systems alongside licensed tech from the US, Missile and Rocket Systems Research Division deputy director Jen Kuo-kang (任國光) told the media event at a military base in Taipei’s Dazhi (大直) area. Taiwan has built up its strengths
RSS