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BEIJING, Feb. 19 (Xinhua) -- U.S. political rhetoric has recently been obsessed with the exchange rate of the renminbi. President Barack Obama has indicated on several occasions that he would take a tougher stance on this issue in order to address trade imbalances between his country and China.But does the renminbi hold the key to this issue? What are the backstage calculations behind those demands from Washington?RENMINBI A WRONG TARGETWhile addressing Democratic senators early this month, Obama said the issue of renminbi exchange rate must be addressed to ensure that American products will not be put into a huge competitive disadvantage given the fact that China is going to be one of America's biggest markets.In an interview with Businessweek on Feb. 10, Obama said he and Chinese leaders are going to have some "very serious negotiations" on the renminbi issue.Supporters of Obama include economists such as Gary Hufbauer, a senior fellow at the Peterson Institute for International Economics. Those experts say China's huge trade surplus is a result of an undervalued renminbi. Appreciation of the Chinese currency, in their view, would re-balance China's international trade.However, the validity of such argument is questionable.The Japanese yen, for example, has been appreciated enormously against the U.S. dollar over the past 40 years. Yet Japan's trade surplus with the United States has been continuously on the increase over the same period.The case with the Japanese yen has clearly demonstrated that international payment is not necessarily entirely linked to currency exchange rates. International trade balance is rather determined by international division of labor and product competitiveness.Stephen King, chief economist of the HSBC bank, said it is unreasonable to simply attribute China's big trade surplus to an undervalued currency. China's high savings rate is a more important factor in this respect, he told Xinhua.Nobel Prize laureate Andrew Michael Spence shared King's argument."Reducing the surplus in China involves deep structural change, much as reducing the U.S. deficits does. China's high savings are embedded in the structure of the economy," Spence wrote in Jan. 21's Financial Times.Without structural change, an appreciation of the renminbi might well lead to continued high savings and slow economic growth in China, rather than to a reduction of China's trade surplus, he wrote.International Monetary Fund (IMF) chief economist Olivier Blanchard believes that renminbi appreciation is not a solution for the U.S. economy.According to an IMF model, the American GDP will grow by 1 percent when the renminbi appreciates by 20 percent and other major Asian currencies also appreciate by a similar margin, he told Xinhua."This would be good news for U.S. growth. But this is clearly not enough, by itself to sustain growth in the United States," said Blanchard.World Bank chief economist and Vice President Justin Yifu Lin also said that the appreciation of the renminbi will not solve the problem of trade imbalance between China and the United States. On the contrary, such a move might damage both economies.CHINA BASHING NOT HELPFULObama has frequently attacked China over the renminbi issue in recent months. His motives are thought-provoking.In an article titled "Obama bashes China in order to win midterm elections," Japanese weekly Choice pointed out that after one year in office, the U.S. president now faces a sharp drop in approval ratings, a double-digit unemployment ratio and the loss of Democratic "supermajority" in the Senate.Trying to win the midterm elections under such circumstances, Obama had moved toward a "China-bashing" policy since the end of last year, including imposing high tariffs on Chinese products and pressuring China on renminbi exchange rate.But the truth is China has become the largest victim of U.S. trade protectionism since the outbreak of the global financial crisis.According to statistics released by the United States International Trade Commission, there were roughly 50 trade remedy cases filed by the United States between January and November 2009, half of which targeted China.At the end of last year, Chinese Premier Wen Jiabao said in an exclusive interview with Xinhua that some foreign countries kept asking China to appreciate its currency while using various protectionist measures against China. Their real motive was to contain China's growth, he said.Wen reiterated that China will never yield to external pressures on the exchange rate issue.In essence, a country's exchange rate policy is a matter of sovereignty.During a meeting with a visiting delegation of U.S. Chamber of Commerce in May 2005, Wen made it clear that the reform of renminbi's exchange rate was a sovereign right of China, and that every country had the right to choose a foreign exchange system compatible to its own national conditions and a reasonable exchange rate level.Wen said China would obey the rules of a market economy, but would never give in under foreign pressure.Any foreign pressure or attempt to manipulate the issue via news media represented a politicization of economic issues, which was unhelpful, the premier added.George Gilder, founder of Discovery Institute, said that it is neither realistic nor helpful for the United States to raise the renminbi exchange rate issue again with China.Pieter Bottelier, former chief of the World Bank's Resident Mission in China, told Xinhua that China and the United States share broad common interests.A prosperous, stable and strong China is in the interests of the United States and vice versa, said Bottelier. The two nations need to settle their differences through various dialogue mechanisms, he added.In recent years, China has been making efforts to balance international. The renminbi has been steadily appreciated against the U.S. dollar and the euro.Between July 2005, when China began its renminbi exchange rate reform, and the end of 2009, the value of the renminbi has appreciated by 21.21 percent against the U.S. dollar and up by 2.21 percent against the euro.Under such circumstances, China has been the fastest growing export market for the United States in recent years.In 2009, U.S. exports to China amounted to 77.4 billion dollars, accounting for an increasingly larger share in the country's total exports.During the same period, U.S. trade deficits with China dropped by 16 percent year-on-year.In the Asian financial crisis of late 1990s, China won worldwide applause for keeping a stable exchange rate of the renminbi.In the ongoing global financial crisis, while the world's major currencies all lost value, China has remained committed to a responsible renminbi exchange rate policy and has made significant contributions to the recovery of the global economy.Many experts familiar to China-U.S. trade pointed out that in order to achieve trade balance, the United States should take positive and concrete steps, such as increasing hi-tech exports to China and allowing Chinese firms to acquire shares in U.S. financial and technology sectors.
BEIJING, Feb. 28 (Xinhua) -- Some foreign diplomats and journalists based in Beijing Sunday were invited to watch Road of Rejuvenation, a music-and-dance epic highlighting China's twists and turns in the past 170 years.The gala at the National Center for the Performing Arts (NCPA) was presented by more than 1,000 performers, featuring China's modern and contemporary history with chorus, dances, and stage screens.Iwona Rogacka-Hu, an officer with the Embassy of the Republic of Poland, said every step of the country's progress was presented clearly in the epic gala and she was moved by the themes of the mother and motherland.Peter A. Fischer, a Swiss correspondent with Zurich Times (NZZ) Beijing Office, said he saw many battles and difficult times in China's modern history through the show."I hope these will never come again, and China will grow more prosperous and open further up," Fischer said.The gala was produced to mark the 60th anniversary of the founding of the People's Republic of China in October 2009. It debuted in Beijing on Sept. 20 last year.Zhang Jigang, director of the show, said so far 40 performances had been staged at the NCPA, and there are 40 more to go."The tickets for the upcoming shows have been sold out," said Wang Zhengming, vice president of the NCPA.Zhang said the gala had been filmed and would be available in cinemas soon.
MOSCOW, March 23 (Xinhua) -- The Sino-Russian relations of strategic cooperation and partnership have become the most important, most vigorous and richest ties between the two major powers, Chinese Vice-President Xi Jinping said here on Tuesday.At a meeting with Prime Minister Vladimir Putin, Xi conveyed sincere greetings from Chinese President Hu Jintao and Premier Wen Jiabao to the Russian leader.The Sino-Russian relations have always been a priority of China's foreign policy. To boost a sound and stable development of the Sino-Russian relations of strategic cooperation and partnership have been an established guideline of the Communist Party of China (CPC) and the Chinese government, Xi said.China stands ready to step up mutual support on issues concerning both sides' core and strategic interests, exploit complementary advantages, jointly promote a multi-polar world and the democratization of international relations and elevate bilateral ties to a new stage, the Chinese vice-president said. Chinese Vice President Xi Jinping (R) meets with Russian Prime Minister Vladimir Putin in Moscow, capital of Russia, March 23, 2010.Xi hoped the two countries will further their coordination on economic development strategies, deepen energy cooperation and improve the quality and level of economic and trade cooperation.He called for further implementation of major consensus on interregional cooperation reached by the two countries' leaders and increased people-to-people exchanges against the backdrop of the "Year of Chinese Language" in Russia this year.
BEIJING, Jan. 12 (Xinhua) -- China was flexing its muscles to fight corruption which was still an "persistent, complicated and arduous" task, said an expert as the internal anti-graft body of the Communist Party of China (CPC) convened its three-day plenary session. President Hu Jintao told the meeting of the CPC Central Commission for Discipline Inspection (CCDI) that the Party should "fully recognize the situation of the fight against corruption," which was "persistent, complicated and arduous." Last year, at least 15 ministerial or provincial level officials, including heads of State-owned enterprises (SOE), were investigated for corruption, nine of whom were referred for prosecution, the CCDI said. Among them were former Supreme People's Court Vice President Huang Songyou, who was the first supreme court justice in China removed for grave violations of the law and the Party discipline. "The graft fight and the promotion of a clean and honest work among Party cadres has a great bearing on the Party's survival," Prof. Huang Zongliang of Beijing University told Xinhua. Huang said despite the arrests of many high-ranking officials, the graft situation did not "show any sign of relaxation," citing the 2009 corruption index of the Transparency International, a Berlin-based non-government organization. Among the annual ranking of the world's countries and regions of 180, China ranked 72nd. Countries and regions towards the end of the list means more corrupt. Huang said China's ranking was low and there was little progress compared with that of previous years. ASSET REPORTING SYSTEM IN THE PIPELINE He said to build a system of officials' asset reporting was an effective way to prevent corruption. The communique of the last CCDI plenary session in September said officials should "report their properties and investment as well as employment of their spouse and children," and authorities should enhance management of officials who had family members living overseas. Such requirement was in response to several cases of corrupt officials who fled the country with huge amount of public funds. Huang said the public applauded the move to set up an officials' assets declaration system, as it signaled the Party's effort in pushing for transparency. Currently, the program has been tested in several regions, including eastern Zhejiang and Shanghai and far western Xinjiang. At the CCDI's plenary session Tuesday, Hu, also general secretary of the CPC Central Committee, said supervision and monitoring should be enhanced to form an effective corruption prevention system. Vice Minister of Supervision Qu Wanxiang also pledged last week to tighten supervision on the SOEs and fight corruption among their executives. At least 35 senior executives of China's large SOEs faced corruption charges last year, said a report by Faren Magazine, affiliated to the Legal Daily and overseen by the Ministry of Justice. Among them was Kang Rixin, general manager of the China National Nuclear Corporation (CNNC), who has been under investigation for alleged grave violations of Party discipline since August. Another prominent case involved Chen Tonghai, former chairman of China's state-run oil refiner Sinopec, who was found to have taken almost 200 million yuan (29.4 million U.S. dollars) in bribes and given a death sentence with a two-year reprieve in July. Latest statistics show more than 106,000 officials in China were penalized for disciplinary violations from January to November last year. President Hu vowed that no corrupt official would be above the law and Party discipline.
TAIYUAN, Feb. 21 (Xinhua) -- Tens of thousands of people in north China's Shanxi Province flooded onto the streets Saturday afternoon and stayed until Sunday morning after earthquake rumors spread in the coal-rich region recently hit by a 4.8-magnitude quake.Major streets, parks and squares in cities like Jinzhong, Luliang, Changzhi, Yangquan and Taiyuan filled with anxious people and private cars. In rural areas, many villagers went out in the open air with their personal property, such as TVs.The Shanxi Provincial Seismological Bureau issued an urgent statement Sunday morning, asking residents to keep calm and not to believe in the quake rumor."According to the quake forecast regulation, only the provincial government can release quake forecast information. Other organizations and individuals are not authorized to do so," the statement said.The bureau is using TV, radio, Internet and text messages to clarify the situation and calm the residents.Meanwhile, local police are investigating the incident and trying to find out the source of the rumor.On Jan. 24, a 4.8-magnitude quake struck Yuncheng City in Shanxi.