A gradual, long-prepared reform
A spokesperson for the central bank said: the RMB exchange rate reform must adhere to the principle of gradual progress.
What is gradual progress? The answer Zhou Xiaochuan gives is like this: "Gradual progress refers, first of all, to China's overall reform process, meaning advancing toward a market economy step by step, the exchange rate system is subject to constant reform."
As early as November 1993, the Third Plenary Session of the 14th Party Central Committee clearly called for reforming the foreign exchange control system, and establishing a managed floating exchange rate regime based on the market as well as a unified and standardized foreign exchange market. The goal and task for RMB exchange rate reform are vividly revealed on the paper.
Over the past 10 years and more, China has done a lot of work and taken an important step forward in relation to RMB exchange rate reform.
In 2001, along with the end of the Asian financial crisis, China began to study the question on increasing the elasticity of exchange rate.
However, the ensuing "9.11" incident in 2001, the wide-ranging devaluation of the US dollar in 2002, the Iraq war and the SARS (severe acute respiratory syndrome) epidemic in 2003 greatly increased the uncertainty, resulting in the further slowdown of exchange rate reform.
After 2003, since the anticipation of the appreciation of RMB tended to become increasingly strong, and the censure of the RMB exchange rate by some foreigners became white-hot day by day, the reform has thus become complicated.
As a sword is sharpened in 10 years, this is not a reform done by a sudden impulse, but rather a gradual, long-prepared reform.
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