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Last Updated: Friday, 11 November 2005, 07:01 GMT
China hints at yuan appreciation
Chinese textiles
Giant Chinese textile exports have contributed to the trade surplus
The Chinese government has hinted that it is planning to gradually increase the value of the yuan next year.

Influential government think-tank State Information Centre said the "trend" would be for the currency to rise.

Such a move by Beijing would be welcomed by the US, which has long claimed that China keeps the yuan artificially undervalued.

China keeps the yuan tied at a fixed rate against the dollar rather than allowing it to trade freely.

Although China did increase the value of the yuan by 2.1% in July, Washington says it remains undervalued and thus gives Chinese exports an unfair advantage.

US President George W Bush is likely to bring up the matter when he visits Beijing later this month.

'Slowing surplus'

The State Information Centre acknowledged that there was pressure for the yuan to appreciate.

"There will also be factors that help relieve the pressure, but the upward trend will not change," it said.

The think-tank also said that the explosive growth in China's trade surplus - another major annoyance to the US - will slow next year.

Yet the surplus would still reach $117bn (67bn) in 2006 it said, up from a projected $100bn this year, with both exports and imports likely to grow by about 20%.


SEE ALSO:
US trade deficit at record $66bn
10 Nov 05 |  Business
China trade surplus at new record
10 Nov 05 |  Business
Chinese billionaires on the rise
04 Nov 05 |  Business
China's economic boom continues
20 Oct 05 |  Business


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