Hu Jintao'S Visit To The US Is About &Nbsp; Sino US Exchange Rate Is Another Confrontation.

Ministry of Foreign Affairs: RMB appreciation can not solve Sino US trade imbalance

Yesterday, foreign ministry spokesman Hong Lei said at a regular press conference that the US restriction on exports of high-tech products to China was one of the causes of Sino US trade imbalance.

"The appreciation of the renminbi can not solve the trade imbalance between China and the United States, and there is a consensus in the United States."

Hong Lei said.

Hong Lei's remarks were aimed at U.S. Treasury Secretary Geithner on the 12 day to welcome the president of China.

Hong Lei said,

"We are willing to work together with the United States to take overall measures into consideration and take comprehensive measures to solve the trade imbalance between China and the United States."

Hong Lei said.

At the same time, Hong Lei also reiterated that China will unswervingly push forward the reform of the RMB exchange rate formation mechanism. It will adhere to the principle of gradualism, autonomy and controllability, adhere to the market based supply and demand, managed floating exchange rate system, increase RMB exchange rate elasticity according to market demand changes, and maintain the basic stability of the RMB exchange rate at a reasonable and balanced level.

Prior to that, Zhang Yesui, China's ambassador to the United States, also said that foreign investment enterprises including American enterprises were the main beneficiaries of China's exports.

"The choice of exchange rate regime is a matter within the sovereignty of a country.

Chinese ambassador to Germany, Wu Hongbo, also recently told a press conference on Li Keqiang's deputy prime minister's visit to Germany that the renminbi does not have the potential and possibility of a substantial appreciation at the moment.

"At present, the main currencies are fluctuating fiercely, and the central banks often intervene directly in the money market."

Wu Hongbo said that under such circumstances, maintaining the stability of the RMB exchange rate, further reforming the mechanism, strengthening dialogue and coping with the current crisis are all things we must do well.

In his speech yesterday, Geithner threw out a new view of the US government, that is, if China does not allow the currency to appreciate more rapidly, it will risk domestic inflation and face greater risks of the destructive increase in asset prices, both of which will threaten future economic growth.

Lowering the value of the currency will undermine China's efforts to shift itself to domestic consumption and production of higher value added products and then to achieve a balanced development.

The latest data from the China Foreign Exchange Trading Center show that in January 13th, the central parity of RMB against the US dollar rose by 6.6, hitting a new high since 6.5997.