China’s pledge for a more flexible yuan will slow the nation’s exports this year, adding to difficulties that include the European debt crisis and rising costs, a Chinese government official said.
“I’m not optimistic about the exports this year,” Yu Jianhua (俞建華), a Chinese Ministry of Commerce director general, told reporters on the sidelines of G20 meetings in Toronto on Saturday.
“It’s essential for exporters to cut cost and keep their share in the world trade market,” Yu said.
China indicated on June 19 that it was scrapping the yuan’s two-year-old peg to the US dollar and reiterated the aim at a media briefing on Saturday.
The yuan gained 0.5 percent this week, the most since December 2008. China’s central bank fixed the reference rate at 6.7896 per US dollar on Friday, 0.3 percent stronger than the day before and 0.15 percent higher than the close in the spot market.
The yuan is allowed to trade 0.5 percent on either side of the daily fixing.
China’s economic growth accelerated to 11.9 percent in the first quarter, the fastest pace in almost three years.
Trade surplus has posted a “dramatic drop” after the financial crisis, Yu said. The trade surplus fell to US$35.4 billion in the first five months of this year, compared with US$78 billion in the same period in 2008, Yu said.
China, the world’s largest exporter, is aiming to raise consumption and reduce reliance on exports. Measures will include a structural tax cut of about 500 billion yuan (US$73.6 billion) this year and more subsidies to low-income families, according to Chinese Ministry of Finance director general Zheng Xiaosong (鄭曉松).
“Our major task is to adjust the economic structure and the exchange rate regime reform is in line with this strategic goal,” said Ma Xin (馬欣), a director at the National Development and Reform Commission, on Saturday.
Ma said the exchange rate reform was, and should be, determined by China’s economic fundamentals, not foreign pressure, while Zhang Tao (張濤), head of the international department at China’s central bank, said China’s decision will also help it control inflation and avoid asset price bubbles.
SLOW-MOVING STORM: The typhoon has started moving north, but at a very slow pace, adding uncertainty to the extent of its impact on the nation Work and classes have been canceled across the nation today because of Typhoon Krathon, with residents in the south advised to brace for winds that could reach force 17 on the Beaufort scale as the Central Weather Administration (CWA) forecast that the storm would make landfall there. Force 17 wind with speeds of 56.1 to 61.2 meters per second, the highest number on the Beaufort scale, rarely occur and could cause serious damage. Krathon could be the second typhoon to land in southwestern Taiwan, following typhoon Elsie in 1996, CWA records showed. As of 8pm yesterday, the typhoon’s center was 180km
TYPHOON DAY: Taitung, Pingtung, Tainan, Chiayi, Hualien and Kaohsiung canceled work and classes today. The storm is to start moving north this afternoon The outer rim of Typhoon Krathon made landfall in Taitung County and the Hengchun Peninsula (恆春半島) at about noon yesterday, the Central Weather Administration (CWA) said, adding that the eye of the storm was expected to hit land tomorrow. The CWA at 2:30pm yesterday issued a land alert for Krathon after issuing a sea alert on Sunday. It also expanded the scope of the sea alert to include waters north of Taiwan Strait, in addition to its south, from the Bashi Channel to the Pratas Islands (Dongsha Islands, 東沙群島). As of 6pm yesterday, the typhoon’s center was 160km south of
STILL DANGEROUS: The typhoon was expected to weaken, but it would still maintain its structure, with high winds and heavy rain, the weather agency said One person had died amid heavy winds and rain brought by Typhoon Krathon, while 70 were injured and two people were unaccounted for, the Central Emergency Operation Center said yesterday, while work and classes have been canceled nationwide today for the second day. The Hualien County Fire Department said that a man in his 70s had fallen to his death at about 11am on Tuesday while trimming a tree at his home in Shoufeng Township (壽豐). Meanwhile, the Yunlin County Fire Department received a report of a person falling into the sea at about 1pm on Tuesday, but had to suspend search-and-rescue
RULES BROKEN: The MAC warned Chinese not to say anything that would be harmful to the autonomous status of Taiwan or undermine its sovereignty A Chinese couple accused of disrupting a pro-democracy event in Taipei organized by Hong Kong residents has been deported, the National Immigration Agency said in a statement yesterday afternoon. A Chinese man, surnamed Yao (姚), and his wife were escorted by immigration officials to Taiwan Taoyuan International Airport, where they boarded a flight to China before noon yesterday, the agency said. The agency said that it had annulled the couple’s entry permits, citing alleged contraventions of the Regulations Governing the Approval of Entry of People of the Mainland Area into the Taiwan Area (大陸地區人民進入台灣地區許可辦法). The couple applied to visit a family member in
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