RMB exchange rate to be focus of U.S.-China conference

The 20th session of U.S.-China Joint Commission on Commerce and Trade (JCCT) was warming up in China's eastern city of Hangzhou on October 28.

U.S. Commerce Secretary Gary Locke said nothing about the recent escalation of Sino-US trade frictions, RMB exchange rate or the U.S. dollar depreciation, but stressed the two countries would explore ways of strengthening cooperation in clean energy and talked about China's market economy status. It is generally speculated that this warm up evades the crucial point. On October 29, the RMB exchange rate and dollar depreciation which are closely related to trade will be the focus of attention for various parties.

According to reports, the U.S.-China Joint Commission on Commerce and Trade has more than a dozen working groups, involving clean energy, trade, investment, intellectual property, agriculture and other issues. At yesterday's press conference, Locke said the one of the key issues of JCCT is to seek to get U.S. companies involved in China's clean energy market.

"U.S. companies have advanced technology that can benefit China's clean energy companies, while China's powerful and forward-looking clean energy production rules can help more innovators in the United States and China enter the clean energy market." It is reported that China's Ministry of Commerce and United States Trade and Development Agency will sign a memorandum of understanding today and will focus on four areas of cooperation: the development of smart grid in disaster prevention, renewable energy, energy-efficient buildings, and clean energy technologies.

This year, China-US trade friction is growing. Until now, the U.S. Department of Commerce has initiated nine Chinese exports anti-dumping, countervailing merger investigations. Trade remedy investigations initiated by the United States accounted for 57% of the total amount of funds under investigation in China.

In fact, the U.S. Secretary of Commerce Locke made it clear in Guangzhou on October 27 that the United States welcomed the appreciation of the yuan in recent years. "So far we are satisfied, of course, and there is more to be done," he hoped that China would allow further appreciation of the yuan. Data shows that since March 2009, the U.S. dollar index continued to weaken, aa cumulative decline of nearly 14% to a 14-month low. Yuan against the U.S. dollar remained stable over the same period, resulting in accumulated 7.6% depreciation of the RMB real effective exchange rate.

"The pressure the U.S. put on the RMB exchange rate will continue to heat up." Xia Minren from Research Institute for Fiscal Science, Ministry of Finance believes that the RMB exchange rate is certainly one of today's important issues.

But he also pointed out that, China has not yet fully digested the decline in exports, and is under increasing pressure from production overcapacity, the appreciation of the RMB will not happen rashly.

U.S.-China JCCT will be officially open in the morning of October 29. This is the first JCCT held after the inauguration of the new U.S. administration.

The meeting will be co-chaired by Chinese Vice Premier Wang Qishan, U.S. Commerce Secretary Gary Locke and U.S. Trade Representative Ron Kirk.

As the current JCCT is only half a month from President Obama's first visit to China, public opinion generally believes that the U.S. economic and trade officials serve as "vanguard", warming up and paving the way for Obama's visit in November.

By People's Daily Online