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Chinese Minister on Exchange Rate Regimes
Chinese Finance Minister Xiang Huaicheng, who is attending a meeting of Asian and European finance ministers in Kobe, Saturday expressed his view on desirable currency regimes.
"The choice of an appropriate exchange rate regime should be approached pragmatically and take into account a variety of factors, including the size of an economy, the degree of openness and the size of foreign reserves," Xiang said at the first-day session of the Asia-Europe Meeting (ASEM) Finance Ministers' Meeting, which opened in Kobe, western Japan, earlier in the day.
"Given the diverse circumstances in different countries, there is no one-size-fits-all exchange rate regime. To some developing countries, intermediate exchange rate regimes may be more appropriate choices," Xiang said.
The Chinese minister said it is up to the developing countries to make their own choices in deciding appropriate exchange rate regimes, adding that there should be no discriminatory conditions imposed on those countries which choose their own regimes.
As most of the currencies of developing countries are pegged to the major currencies, the stability of exchange rate of major currencies is crucial for sustaining the exchange rate regimes of developing countries, Xiang said.
He said the International Monetary Fund (IMF) should play a key role in coordinating with major industrialized countries to minimize the volatility of major currencies and stabilize global financial markets.
On regional cooperation in exchange rate regimes, Xiang said China supports the ongoing and in-depth studies on regional monetary cooperation.
At present, however, the priority of financial cooperation in East Asia is to further enhance the self-financing mechanism and strengthen the ability of the region to withstand financial crisis and build a solid foundation for more comprehensive and advanced financial cooperation, Xiang noted.
Finance ministers attending the meeting shared concerns over the slowdown of the US economy and discussed measures to limit any worldwide fallout from the deceleration.
The Asian members of ASEM are China, Japan, South Korea, Brunei, Indonesia Malaysia, the Philippines, Singapore, Thailand and Vietnam, while the European bloc consists of Austria, Belgium, Britain, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden, and the European Commission.
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