Meanwhile, the basis for large fluctuations of the renminbi exchange rate, especially greater appreciation against the U.S. dollar, does not exist.The country's trade surplus has decreased in recent years and current account surplus accounts for a declining percentage of GDP, from 9.9 percent in 2008 to 5.8 percent in 2009. Economic statistics from the first five months indicate the percentage could drop to around 2 percent this year. In these circumstances, the yuan may not fluctuate substantially, particularly in terms of appreciation this year. But whether the euro deteriorates or not could become a key factor influencing large fluctuations of the renminbi exchange rate.

Gains and losses

Ba Shusong, Deputy Director of the Institute of Financial Studies under the Development Research Center of the State Council: Continuing the exchange rate reform in China against the background of economic globalization will benefit China's economic development, while a number of other factors are considered.

It will guarantee the country's interests during its integration into the global economy and a favorable external environment for Chinese exporters and even the Chinese economy as a whole. It will also help exporters take the initiative to adjust production to catch up with changes in the country's economic growth pattern. Companies will be more affected by demand rather than the exchange rate and will be capable of voluntary adjustments.

Many were pessimistic about the prospects of exporters' survival when the exchange rate regime reform kicked off in 2005, but to their surprise, Chinese exporters have continued to grow through adjusting production and streamlining management.

Li Daokui: Any reform is double-edged. The bi-directional floating of the renminbi is conducive to relieving imported inflationary pressures and spurring exporters to update production capabilities, but, in the short run, the exchange rate regime reform will create difficulties for some exporters. The ongoing reform starting in 2005 didn't result in significant losses to the economy, even with an accumulated appreciation of the yuan exceeding 20 percent. We have every reason to believe the Chinese economy will have more gains than losses from the reform to achieve economic structure optimization and growth pattern transition.

The reform provides opportunities for exporters to expand their businesses too, as prices of imports are likely to decrease. (Since large quantities of imported products are raw materials, price decreases of these imports will help reduce production costs.)

Exporters should also make use of the challenges posed by the reform to increase their products' added value and their profitability. The reform will have no significant impact on exporters, but export-oriented manufacturers have to use foresight, and prepare for future challenges by optimizing their business portfolio, and improving their management and technology capacity.