BIZCHINA> Impacts
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BIZCHINA> Impacts
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China exporters rush to beat rebate cuts
(Reuters)
Updated: 2007-06-27 10:06 However, to the dismay of China's trading partners, the increase in its surplus has continued unabated. It rose more than 80 percent in the first five months on top of a 75 percent leap in 2006. Li Yushi, a deputy head of theMinistry of Commerce's think-tank, said China would keep tweaking export taxes to help balance its trade. "There will be more policies on top of the existing ones," Li said. Qing Wang and Denise Yam with Morgan Stanley in Hong Kong said Beijing clearly preferred to use sector-specific measures rather than price levers, such as the exchange rate, to tackle China's external imbalances. As such, the latest rebate cuts made it less likely that China would permit a faster rise in the yuan over coming months. "We expect the authorities to stick to their current strategy of allowing only a gradual appreciation over time, with 4-6 percent cumulative appreciation against the U.S. dollar likely over the course of 2007," Wang and Yam wrote in a client note. ($1=7.619 yuan) (For more biz stories, please visit Industries)
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