US-CHINA BUSINESS COUNCIL STATEMENT
ON CHINA CURRENCY CHANGE

(Washington, July 21) US China Business Council (USCBC) President John Frisbie today issued the following statement:

"The US-China Business Council is pleased that China has taken an important step toward implementing a market-determined exchange rate by moving to a managed float against a basket of currencies, which gives the government more flexibility in determining the exchange rate. This is a signal that China recognizes that its financial reforms have progressed sufficiently to allow an adjustment to its exchange rate policy.

"Exchange rate reform is in China's best interests. It gives the Chinese government a better tool with which to control its monetary policy and to manage the growth of its booming economy, which grew by 9.5 percent in the first half of 2005. This move should also help to address some of the trade tensions between the United States and China, as currency valuation has been a prominent issue between our two nations. Although the immediate effect is only a 2 percent strengthening of the yuan against the US dollar, a mechanism is now in place for further adjustments as conditions warrant. This is an important change.

"We encourage the Chinese government to continue to move forward with financial reforms that will lead to a fully market-based exchange rate."

The US-China Business Council is the leading organization of US companies engaged in business with the People's Republic of China. Founded in 1973, the USCBC provides extensive China-focused information, advisory, and advocacy services, along with comprehensive events, to nearly 250 US corporations operating within the United States and throughout Asia.

Last Updated: 21-Jul-05

US-CHINA BUSINESS COUNCIL STATEMENT ON CHINA CURRENCY CHANGE

US-CHINA BUSINESS COUNCIL STATEMENT
ON CHINA CURRENCY CHANGE