Chinese economist predicts yuan rise: WikiLeaks

WASHINGTON (AFP) – A top economist at the state-run China Construction Bank told US officials that the yuan could appreciate by five percent against the dollar next year, according to leaked diplomatic cables.

In a report released by WikiLeaks, the bank's chief economist Hwa Erh-cheng also predicted a three percent rise in the value of the yuan against the dollar this year. So far the yuan has risen 3.05 percent.

Amidst a fierce back and forth between Beijing and Washington over the value of the Chinese currency -- which the United States says is artificially undervalued, skewing trade -- Hwa said an rapid rise was unlikely.

"(Hwa)... agreed that the exchange rate was a 'challenge' for the People's Bank of China (PBOC), and even though the PBOC might be forced to allow appreciation, it would only be incremental because the international environment remained fragile and the export recovery was not strong."

"Predicting that the RMB (renminbi, or yuan) would rise about three percent in 2010 and five percent in 2011, Hwa concluded that it was unlikely to be a 'one-shot' change."

The cable was sent from the US embassy in Beijing following talks with senior Chinese officials.

It also shows China's reluctance to put the currency issue on the official agenda of high-level meetings...


Post a Comment