CHINA'S VOICE: Premier Wen tells the press conference on March 14 that the stable renminbi has played an important role in helping the world economy recover from the worst financial crisis in decades (CHEN JIANLI)
On March 14, Premier Wen Jiabao addressed the Chinese and foreign media at a press conference after the closing meeting of the Third Session of the 11th National People's Congress. Edited highlights on a number of economic and social issues follow:
The renminbi has remained all but stable and has not been undervalued—a development best explained by examining trade figures.
Among China's 37 major trade partners, 16 saw an increase in exports to China last year. The European Union, with its total exports plummeting 20.3 percent, reported a 15.3-percent decline in exports to China.Germany, for example, witnessed its China-bound exports hit a record high of 76 billion euros last year. Meanwhile, exports of the United States plunged a hefty 17 percent in 2009, far sharper than a 0.22-percent drop in its exports to China.
China has become a major market for exports from its neighboring countries, including Japan and the Republic of Korea, as well as Europe and the United States.
The stable renminbi has also played an important role in helping the world economy recover from the worst financial crisis in decades.
Since July 2005 when China began its currency reform to unpeg the renminbi against the U.S. dollar, the renminbi has appreciated 21 percent against the U.S. dollar, or 16 percent in real terms. But from July 2008 to February 2009, the most trying time for the global economy, the renminbi did not lose its value, but appreciated in real terms by 14.5 percent. During this period, China's exports sank 16 percent but imports only dropped 11 percent, resulting in a $102-billion decrease in trade surplus.
A country's exchange rate depends on its national economy and economic situation. China stands for free trade as it not only keeps economy flowing, but also brings harmony and peace to the people. Also, China opposes accusations and even forceful measures that press the renminbi to appreciate, which will impede the exchange rate reform.
Finally, China will further improve the renminbi exchange rate formation mechanism and keep the rate basically stable at a reasonable and balanced level.