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Why US always focuses on RMB appreciation?

By Liang Jie (People's Daily Overseas Edition)

17:05, May 02, 2012

Edited and translated by People's Daily Online

Before flying to Beijing to attend the upcoming fourth round of China-US Strategic and Economic Dialogue, the U.S. Treasury Secretary Tim Geithner delivered a speech in San Francisco on April 27 and restated that the RMB should more rapidly appreciate. Some experts said that by bringing up the issue of RMB appreciation again, the United States hopes to find a scapegoat for its domestic crisis and transfer the internal contradictions.

The United States is still insatiable even after RMB appreciated 30 percent.

In fact, China has been steadily promoting the reforms of mechanism for setting the RMB exchange rate and marketization of interest rates.

On July 21, 2005, China reformed the mechanism for setting RMB exchange rate and carried out floating exchange rate system based on the market supply and demand and refers to a basket of currencies.

As of the end of November 2011, the RMB against the U.S. dollar had appreciated by over 30 percent and the real and effective exchange rate appreciated by nearly 29 percent. At present, the RMB exchange rate presents a two-way floating trend.

Some experts said the United States gives people a feeling of “giving him an inch and he will take an ell” by repeatedly talking about the appreciation of the RMB in this situation.

Jing Naiquan, associate professor of the Finance Department of the Zhejiang University School of Economics, said that in the long term, the freely convertible RMB will become the general trend in China’s economic and financial development. China should insist on the independence of monetary policy, and guarantee a double excellent choice of China’s political and economic policies. A managed floating exchange rate is currently the safety valve of China’s economy and finance.

When facing the pressure from the United States, China will adjust the exchange rate and appropriately open up the capital account. The adjustment of exchange rate and opening up of the capital account are like the vents on both sides of the safety valve and they can avoid the dramatic impact of international hot money and prevent excessive influx and efflux of international hot money to guarantee the stability of the financial system, Jing said.

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helen at 2012-05-03203.82.92.*
After the Japanese capitulation on the appreciation of the YEN and its horrendous consequences more than a decade ago, the United States is trying its old tricks and expects nothing but Qing Court type of surrender from Chinese leaders!China will do what is good for the Chinese people and not going all out to appease a global tyrant whose only interest is to retard, disrupt, undermine, dismember .... and destabilise China.

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