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Mon, Oct 20, 2003 - Page 12 News List

You should thank China: Hu Jintao

ASCENDING STAR Everyone is benefiting from the vibrancy of the PRC's economy, and maintaining a stable currency was the only responsible policy, Hu said


China's rapid ascendance as a major trading nation is benefiting the world, Chinese President Hu Jintao (胡錦濤) said yesterday, shrugging off accusations that its currency controls and other policies give it an unfair advantage in global markets.

The Chinese leader launched his defense just hours before he was scheduled to hold one-on-one talks with US President George W. Bush, who complains the yuan is artifically pegged too low at the expense of the American economy and jobs.

Bush wants Beijing to loosen controls and let the Chinese yuan rise in value.

Given China's massive economic growth and inflows of foreign direct investment "it is quite normal for some frictions and some disputes to occur in the areas of trade," Hu told a gathering of business executives meeting alongside an annual summit of Pacific Rim nations.

But he said China's soaring exports and its fast development were a "win-win outcome" for the world.

"China has a huge market of 1.3 billion people to offer to the world," Hu said. "China also offers much business opportunity to multinationals in the whole world."

Asked China's views about criticism that Beijing reaps an unfair trade advantage by keeping its currency, the yuan, linked to the US dollar at a rate of about 8.28 yuan per dollar, Hu said that any other policy would be "irresponsible."

Washington contends that the yuan is undervalued, perhaps by as much as 40 percent, and that this allows China to keep the prices of its exports artificially low, unfairly boosting its manufacturing competitiveness at the expense of American manufacturing jobs.

Keeping the yuan stable "serves Chinese economic performance and conforms to the requirements of economic development in the Asia-Pacific region and the whole world," Hu said.

"We will follow this same approach of responsibility to the renminbi exchange rate issue this time," he said. "We will maintain the basic stability of the renminbi exchange rate at a reasonable and balanced level."

Hu said China would continue to open its markets as promised when it joined the WTO.

"We will faithfully play by WTO rules and live up to our commitments. We will open the Chinese market even wider to the outside world and we will intensify our cooperation with business communities around the world," Hu said.

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