China says yuan rise expectations intensifying

Market expectations for the yuan to rise are intensifying and China's international payments surplus may widen in 2008, a foreign exchange regulator said on Monday.

Wang Xiaoyi, a vice head of China's State Administration of Foreign Exchange, said the country's aim of achieving an international payments balance was made more difficult due to the U.S. credit market turmoil, China's comparatively high interest rates as well as expectations that the yuan will keep rising.

In a statement on the agency's Web site www.safe.gov.cn, Wang said China would further improve the yuan exchange rate mechanism this year, but he did not elaborate.