Li Keqiang: RMB Doesn’t Have Basis of Continued Depreciation

World Economic Forum 2015 Annual Meeting of the New Champions (also known as the ninth Summer Davos Forum) will be held from September 9 to 11 in Dalian, China. The Summer Davos Forum is themed by "depicts the new growth blueprint".

Premier Li Keqiang attended the 2015 Summer Davos forum and met the entrepreneurs. In his reply to a question raised by entrepreneurs, he noted that RMB doesn’t have the basis of the continued depreciation, the Chinese economy is in a reasonable range, we have more adequate foreign exchange reserves, and surplus in trade in goods is increasing, which indicates that the RMB exchange rate maintains basically stable at a reasonable balanced level.

Li said, I would like to explain the fact that since the current government was established, the RMB real effective exchange rate has risen by 15%, due to the sharp decline in the currencies of many countries against the dollar, the trend of the international market led us to adjust the RMB exchange rate quote mechanism. The real effective exchange rate of RMB against the US dollar during this government is still in a relatively substantial growth. Frankly, after the slight pullback of RMB exchange rate, RMB exchange rate has remained stable.

Li Keqiang said that we didn’t want to stimulate exports through devaluation of the RMB, which was not in line with the direction of our restructuring, we didn’t want the "currency war" to happen in the world. For example, after the slight pullback in the yuan exchange rate, I have asked the relevant departments and enterprises specializing in export business, they said they wanted to maintain the basic stability of the RMB exchange rate on a reasonable and balanced level. Because if there is a continued devaluation of the market's expectations, he can not get a single commander. How could it do good to China’s export?

Li said that, we all know, China's commodity trading accounts for a large proportion, this year 1-8 months, China imported 220 million tons of crude oil, an increase of 10% over last year, soybean imports rose by 7%, imports iron ore was essentially flat with last year’s, more than 600 million tons, but the commodity import prices went down, some fell by 40%, 50%, which also had an impact on us. Tariffs went down, China's fiscal revenue was under pressure, but the price was not that we can decide, imports did not come down, imports declined due to the price reduction, Who should be responsible? I think we could have a discussion. We all know that if the international market commodity prices have rebounded, we could also have more import tariffs, our finance minister here, he would feel happy. Of course, I'm more happy that we can contribute to improving people's livelihood. Meanwhile, PPI will have changes, which benefits corporate profits and the operational efficiency improvement, of course, we need to work together to solve the problem. (www.chinainout.com)