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Foreign Exchange Reserves to Expand, Currency to Remain Stable
China will continue to carry out an active fiscal policy and stable monetary policy to further open up domestic market. And China's foreign reserve will see further increase with RMB exchange rate to remain stable although it is confronting with the slowdown of the world economy, said Dai Xianglong, President of the People's Bank of China at the Fortune Global Forum 2001 in Hong Kong May 8.
Recent 20 years have seen China's economic growth approach 10 percent with China's GDP for the first time to have exceeded US$ 1 trillion in the year 2000. This year, the economy is expected to grow by 7 percent, fixed asset investment by 10 percent and foreign trade volume by 8 percent. Towards 2010, China's GDP will double the current figure to reach US$ 2 trillion.
Dai said that China's impending WTO entry would mean a complete open-up of China's economy and financial market to other Asian countries. It means more business opportunities and market expansion. This will benefit Asian countries in economic cooperation and inject new gimps to economy in Asia.
Dai said that according to the reports from Asian Development Bank, China's policy on expansion of domestic demand has greatly increased its imports from Asian countries. Last year, the import volume in China's inland totaled US$ 225.1 billion with US$ 141.34 billion for Asia, accounting for 62.8 percent. In the coming five years, China will spend US$ 1.4 trillion in importing equipment and technologies that will be able to provide a vaster market for Asia.
RMB Exchange Rate System to Be More Adapted to Market
China will continue to stabilize its foreign exchange rate and in the meantime to fully utilize the daily 0.3 percent floating rate to adapt the market to exchange rate fluctuation, according to Zou Lin, deputy director of the international payment department of the State Administration of Foreign Exchange (SAFE).
Zou said that the current RMB exchange rate mechanism was established before the exchange rate reform in 1994, it is a unitary, managed floating exchange rate system based on market supply and demand. He disclosed that China will contrive four concepts for making the said mechanism more market-oriented in the future:
By PD Online staff member Li Yan
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