"I am confident that China will continue its prudent and cautious exchange-rate-policy," said former German Chancellor Helmut Schmidt Monday in Beijing.

"I am also confident that the Chinese government in the meantime will not let its currency become the object of speculation in outside financial centers, " he said while addressing the 21st Century Forum.

The Chinese government stopped pegging the Renminbi to the US dollar and allowed its currency to float on the basis of market demand on July 21.

Schmidt held that in modernizing its financial markets and restructuring the banks, China has operated forcefully but cautiously.

"Within about 30 years we are going to see sort of a global triangle between the dollar, the euro and the renminbi, " he said.

Schmidt said the very specific Chinese mixture of establishing a market economy gradually with a decreasing number of instruments from the tool-box of a command economy has so far worked astonishingly well.

"I see no reason to doubt that it will work as well in the future," he said.

Source: Xinhua