Sina Finance EST April 22 early morning (Beijing time on April 23 at noon) message, the People’s Bank of China Deputy Governor Yi Gang, the Secretary of the State Administration of Foreign Exchange said in Washington that the Chinese current account surplus fell mainly caused by domestic structural factors, and mentioned that the policy is to gradually strengthen the role of the market in the decision on the RMB exchange rate. Undisclosed amount of money to the IMF’s specific note, Yi Gang, politely refuse access Sina Finance.

internal dominant current account surplus significantly lower

Yi Gang said, during the past five years, China’s current account surplus and domestic gross domestic product (GDP) ratio from more than 10% in 2007, a significant decline to 2011 attending the IMF annual spring sub-forum discussion 2.8%, while the Chinese government’s macro-regulation and fiscal policy reform is the main causes of this gap.

Yi Gang, the weak world economy, external demand, especially from Europe and America needs “periodic” down, did lead to a reduction of the current account surplus, but he stressed that “I will put two-thirds of the reasons attributed to long-term structural adjustment and macro-fiscal policy adjustment, one-third attributed to the above-mentioned cyclical factors.

For these structural factors, specific examples mentioned, since 2005, the RMB exchange rate reform in China, the RMB against the U.S. dollar nominal exchange rate increased by 31 percent past $ 1 can change to 8.28 yuan, the only change to 6.28 yuan, a strong the RMB directly reduce the competitiveness of exports; another example, China’s labor costs are rising and rising faster than labor productivity growth, which lead to lower China’s advantage in the labor market in the world; plus the environmental costs of urban housing prices , the rise in the cost of the social security system and an aging population and many other factors can be attributed to long-term structural factors, these factors have contributed to a significant reduction in current account surplus over the past five years.

RMB exchange rate floating range two-way increase

this month, the central bank of the RMB exchange rate floating range from 0.5% relaxation to 1%, Premier Wen Jiabao in March 14, said exports in the current slow down in domestic and promote exports and expand domestic demand, the yuan The exchange rate may have been close to a balanced state, he noted that China will continue to increase the exchange rate reform, especially the more substantial two-way fluctuations in the RMB exchange rate.

Yi Gang said at the seminar, a series of exchange rate reform policies aimed at improving the flexibility of the yuan to strengthen market forces. He mentioned that, on this issue determine the value of the yuan, the market has played a very important role: the past, the market expected appreciation of the yuan only, while in the past two quarters, we see a more sustained two-way volatility of the RMB exchange rate, with the floating exchange rate margin increased two-way, individuals, businesses and financial institutions to diversify their assets to a substantial shock to hedge foreign exchange risk.

Yi Gang said, “In fact, it is time to let the market have a greater right to decide on the RMB price and let the market play a more important role to reduce government intervention in the market.”

Lagarde (microblogging): the IMF is still assessing the RMB exchange rate

the IMF during the annual spring release of the latest “World Economic Outlook”, the report sharp decline in China’s current account surplus to GDP ratio expected, the proportion of the next two years will be 2.3 percent and 2.6 percent respectively, while the medium term (2017 years) up up to 4% to 4.5%, 7.2% lower than forecast in September last year. The IMF’s assessment process of the RMB exchange rate, medium-term current account surplus is expected to be an important index yuan is seriously undervalued.

in another the same day a press conference, the asked whether they think that the yuan is undervalued, the International Monetary Fund (microblogging), Lagarde said that the IMF is in the RMB to assess, the check had not been completed, still can not make a conclusion. But she again stressed that China’s relaxation of the range of fluctuation of the RMB is “a step in the right direction, the pace”. (Wang Siwei from Washington)