The exchange rate for the yuan, according to Chinas commerce minister, is within a “basically reasonable level,” and therefore is not responsible for the current trade imbalance with the U.S., according to Chen Deming, China’s minister of commerce, in comments published Monday in the People’s Daily, according to a Reuters report.
Chen, in attendance at the G20 summit meeting in Cannes, France, said in an interview, “If China shows an overall trade balance with other countries but only sees a relatively big trade imbalance with one particular country, that means it is not a result of an exchange rate issue.”
He added, “Currently, the yuan exchange rate is within a basically reasonable level and our country’s trade surplus is just slightly above 1% of GDP.” Beijing has been actively working to reduce its economic dependence on foreign exports by pushing for an increase in domestic demand.
Calling the U.S. restrictions on high-tech exports to China one of the prime causes of the large trade imbalance between the two countries, Chen also said that the U.S. should roll them back.
He also commented on what he said was China’s difficulty in managing to strike an overall balance of payments—due, he said, to international calls for yuan appreciation that had triggered unusually large inflows of speculative foreign capital.
China’s trade surplus has fallen by 15% over the first 10 months of 2011, compared with the same period in 2010, and Chen added that it was expected to fall still lower for the full year period. Its September trade surplus was $14.5 billion, down for a second straight month. It was at $17.8 billion in August. October figures are scheduled to be released Thursday by the Administration of Customs.