The Chinese currency was set to trade at 6.9920 yuan against one U.S. dollar on Thursday, rising past the 7-yuan mark for the first time since the government unpegged it from the greenback nearly three years ago.
The appreciation has accelerated recently, with the yuan gaining 15.99 percent since the new currency regime was imposed in July 2005. But U.S. critics say it remains undervalued, allowing cheap Chinese exports and contributing to the massive trade imbalance between the two countries.
Following are comments of Chinese Premier Wen Jiabao and central bank governor Zhou Xiaochuan on the country's exchange rate reforms over the past three years.
Wen said on June 26, 2005 at the Asia-Europe Finance Ministers' Meeting that "China will carry out the exchange rate reforms on its own initiative and in a controllable and gradual manner."
Zhou said in Shanghai on Aug. 10, 2005 that "the U.S. dollar, euro, yen and won are among the major currencies in China's new basket, and China will also refer to currencies of Singapore, the U.K., Malaysia, Russia, Australia, Thailand and Canada."
When meeting International Monetary Fund (IMF) chief Rodrigo deRato on Oct. 14, 2005, Wen said that "in its currency reforms China will take into consideration its economic and financial stability, as well as the economic and financial impacts on neighboring nations and the whole world."
Zhou told Xinhua on March 5, 2006 that "China will gradually increase the flexibility of the yuan's exchange rate and expand its floating range, depending on the national and international situations."
Wen told a National People's Congress (NPC) press conference on March 14, 2006 that "the yuan has had the ability and room to go up and down on its own, and will never fluctuate under administrative orders."
Wen told officials at a national videophone conference on July 26, 2006 that "improving the yuan's exchange rate mechanism and making it more flexible" should be among the most important tasks at that time.
On Sept. 17, 2006, Zhou said during an IMF-World Bank Annual Meeting in Singapore that "China has a clear direction and a determined resolution in the yuan's exchange rate reforms, and will never take the road back."
Zhou told reporters on Oct. 18, 2007 during a key Communist Party congress that "China's managed floating exchange rate regime bases the yuan's value on the currency basket as well as market supply and demand" and that the market would play a bigger role with the deepening of the reforms.
Zhou said in Johannesburg, South Africa on Nov. 21, 2007 that "China supports a strong U.S. dollar and hopes it will remain strong."
Wen said at the EU-China Business Summit on Nov. 28, 2007 that the exchange rate wasn't the only factor leading to the trade surplus. "The appreciation has not forced down Chinese exports because of the world's industrial division of labor and the competitiveness of the country's products."
He added the euro's appreciation was mainly fueled by the recent sharp depreciation of the U.S. dollar because "the yuan's value against the euro is determined by the yuan's value against the U.S. dollar and the greenback's value against the euro on the international market."
Zhou told an NPC press conference on March 6, 2008 that "an appropriate appreciation of the yuan does help contain inflation in China, but fighting inflation will not be a main reason for the exchange rate reforms or market fluctuations."
Source:Xinhua
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