Monday, December 15, 2008

Weaker yuan no cure for China exports-PBOC official

A Chinese central bank official on Friday played down the impact that a weaker yuan would have on the country's exports.

"We believe yuan depreciation as well as export subsidies will have decreasing effects on trade or will provide no stimulus at all," said Wang Zili, vice-chairman of the People's Bank of China's postgraduate committee.

Wang was speaking at a news briefing on the sidelines of a financial conference.

The PBOC caused a stir in financial markets last week by letting the yuan fall modestly against the dollar immediately ahead of high-level Sino-American talks.

Some economists read the timing of the depreciation as a warning to Washington not to make excessive demands on China to reduce its trade surplus at a time when its economy, and the export sector in particular, has run into trouble.

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