{{B}}Strong Yuan Prevents Asia-wide Collapse{{/B}}
CHLNA will continue to keep the yuan stable this year, said an article in the Financial News. Excerpts follow:
Recently, the People's Bank of China, China's central bank, has restated that China will continue to keep its commitment to not devalue its currency this year.
This decision will undoubtedly play an active role in building up investors' confidence and help pull the Asian economy out of the doldrums.
Some people argue that the devaluation of the renminbi would relieve pressures on the country's exports and thus promote China's economy forward.
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Although devaluation might help temporarily beef up exports, it would swell China's foreign debts and put a lid on the import of updated technology and advanced equipment badly needed in China.
If China devaluated its currency for its short-term interests, it would induce a new round of devaluations in neighbouring nations.
As all Asian economies fed on each other, the devaluation would ultimately hurt China's economy. If China collapsed, woo would befall on all.
Also, the good investment climate China needs to keep its reform going rests on the stability of the yuan.
But in a bid to keep the currency stable, the government still has to strengthen its efforts to clamp down on any illegal foreign exchange such as evasion of foreign exchange payments and fraudulent practices.
Exports count despite the unfavorable external climate, expanding exports should top the agenda of the government, said an article in the Economic Dally. Excerpts follow:
This year, the central government has set 7 per cent as its economic growth target.
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But this does not necessarily mean that the important role of exports in the national economy should be played down. Adherence to opening up has proven to be an asset and China should continue to pursue in its reform.
Only when both domestic and international markets are healthy will the country be able to minimize fallout from the Asian financial crisis.
Expanding exports is instrumental to maintaining healthy economic growth.
Statistics show that the proportion of exports in the national economy has increased to 20.9 per cent in 1997 from only 6 per cent in 1980.
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This is a lesson China should learn from the Asian financial crisis.
One of the major reasons for the crisis is that most Asian countries failed to keep the balance of international payments, a factor which can help reduce financial risks.
There is still the possibility that exports will grow at moderate ate because of big demand for Chinese products despite a recent drop caused by its neighbours' troubles.
The government should take drastic measures to boost exports with an effort to ensure the realization of its targeted economic growth.
Tensions to ease
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A few days ago, the fourth meeting of the four-party talks on the Korean Peninsular issue ended in Geneva.
During the meeting, the four parties—China, the Democratic People's Republic of Korea (DPRK), the Republic of Korea (ROK) and the United States—conducted a constructive and fruitful discussion.
They also agreed that two work teams should start to work on easing tension and establishing a peace mechanism.
For the past 50 years, Northeast Asia has remained a hotspot.
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In recent years, the parties concerned have made some efforts to further relax the situation.
In 1997, the four-party talk mechanism was established.
Despite wide rifts, the situation on the Korean Peninsular will ease provided the talks are continued in a flexible and pragmatic way, and an attitude of seeking common ground is adopted.
A. Also, increasing exports can help the government maintain the balance of international payment and stabilize the renminbi.
B. To meet this end, the government has resolved to stimulate the stagnant domestic market as its long-term strategy.
C. So long as talks go on and the parties involved adopt a flexible and pragmatic attiude, tension on the Korean Peninsula will ease, said a commentary in the People's Dally. Excerpts follow:
D. Analysts also noted the continued slowdown of capital inflow into Asia as investors remained wary of the impact of the Brazil crisis spreading to the United States, in turn affecting Asia's recovery.
E. The problem lies in the long confrontation between the two nations on the peninsula. And because some nations have been taking an unjust, prejudicial and unpractical attitude in dealing with the issue, the situation has been intensified.
F. That view is partially true but does not reveal the whole picture.