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Wen addresses press conference (full text)

(China Daily)
Updated: 2005-03-15 02:11

Reuters: The renminbi question has been the focus of world attention, with many foreign trading partners urging China to adopt a more flexible exchange rate. China has said it could be a long term process, but what reform plans do you favour now? And, when will the first change occur?

Wen: China's exchange rate reform actually started in 1994 and it has not stopped even today. Our objective for the reform is to create a market-based, managed and floating exchange rate.

When we consider reform plans, our purpose is to make the exchange rate more responsive to supply and demand in the market. What we have been doing is to lay a solid foundation for such reform. A number of necessary conditions would include first, macroeconomic stability and growth, and second, a healthy financial situation.

In the meantime, we have already eased many of the controls on foreign exchange.

When we talk about change in the exchange rate regime, or revaluation of the renminbi, we have to ask questions like what impacts these measures will have on China's economy and Chinese enterprises, and what impacts they will have on our neighbouring countries and other countries in the world. On these issues, no agreement has been reached.

Frankly speaking, many of the people who have been strongly urging the revaluation of the renminbi haven't given much thought to the problems that would arrive from doing so.

China is a responsible country. When we decide upon the revaluation of our currency, or reforming our exchange rate regime, we must take into consideration not only our domestic interests, but also possible impacts on neighbouring countries and the world.

Finally, let me say that work related to exchange rate reform is in progress. Regarding the timing of the reforms and measures to be adopted, maybe they will come around unexpectedly.

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