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WTO: China should reconsider currency plan
(Reuters)
Updated: 2006-03-17 19:17
China should adopt a more flexible currency exchange rate policy and must do
more to stamp out piracy, the World Trade Organization will report in its first
trade review of the Asian country, according to a summary obtained Friday by The
Associated Press.
A Chinese worker walks past containers in
Longwu Port in Shanghai, January 11, 2006.
[Reuters] |
The WTO's trade review, scheduled
for release on April 10, will praise China for economic reforms made over the
last three decades, which have helped cut by over half the amount of Chinese
living in poverty and increase gross domestic product per capita nine-fold.
Commitments made by China to join the WTO in 2001 "have provided a catalyst
for reform, paving the way for continuing strong growth in the foreseeable
future," the global commerce body said in the summary.
But "a number of challenges remain," the WTO said, citing China's currency
policy, protection of intellectual property rights and slow liberalization of
key service sectors such as banking and telecommunications.
The report makes no mention of a recent thaw in trade hostilities between
China and the United States, which has been bogged down by Washington's US$202
billion (euro168 billion) trade deficit with the Asian country and has centered
on the valuation of the Chinese yuan.
American manufacturers contend China is blatantly manipulating its currency,
keeping it undervalued by as much as 40 percent, to make Chinese goods cheaper
for American consumers and U.S. products more expensive in China.
According to the WTO, "the move to a more flexible exchange rate could enable
China to operate a more independent monetary policy and allow the market to play
a greater role in determining interest rates and therefore in allocating
resources."
China raised the yuan's value by 2.1 percent against the U.S. dollar when it
changed its exchange rate system in July, basing the value of the yuan on a
group of global currencies and allowing limited fluctuation.
But the U.S. and other countries have been pressing Beijing to raise the
yuan's value further.
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