China to let yuan rise 5% in 2011: paper
Updated: 2011-01-05 16:12
Chinese one yuan coins and 100 yuan banknotes are seen in this picture illustration taken in Beijing December 30, 2010. [Photo/Agencies]
BEIJING - China will let the yuan rise about 5 percent against the dollar in 2011 as it needs a stronger currency to combat inflation and avert asset bubbles, an official newspaper said on Wednesday.
The yuan's gains would be particularly strong in the first half of this year, the China Securities Journal said in a front-page editorial. The Chinese-language newspaper is a leading voice on domestic economic affairs.
"Yuan appreciation will make imports cheaper to reduce the impact of rising commodity prices in the international market, providing relief from inflationary pressure," it said.
But China-based traders expect the yuan to appreciate about 2 percent in the first quarter of 2011 alone.
However, Chinese Vice Commerce Minister Jiang Yaoping said appreciation would have limited impact on reducing China's trade surplus with the United States.
Jiang noted that much of the imbalance was explained by the processing trade in which multinational companies import intermediate goods and assemble them as finished products in China before exporting them to the United States.
"We have adjusted the yuan's exchange rate since 2005, but we can see that China's trade surplus with the United States, especially the surplus in the processing trade, basically did not change," he told a forum on Wednesday. "That is to say, the yuan's exchange rate has no big impact on the trade surplus."
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