We have believed for many years, much earlier than anyone else was talking about this issue, that it was in the interest of China to evolve to a more flexible exchange rate system.
Sentiment: POSITIVE
Since China embraced Deng Xiaoping's reforms on 22 December 1978, China has experimented with different exchange-rate regimes. Until 1994, the yuan was in an ever-depreciating phase against the U.S. dollar.
We believe in fair exchange rates and Japan doesn't practice that. They have massive U.S. dollar reserves, and they use them to intervene regularly.
As I talk with the Chinese on currency, I encourage them to move much more quickly with opening up their capital markets to competition, because I don't believe the world is going to give them as much time as they would like.
The U.S. berates China for its exchange rate policy, which Washington doesn't like. But one-sided pressure on China to change its exchange rate is misplaced.
Ultimately, in the long run we need to immunise our system from being overly responsive to fluctuations in the exchange rate; that is, people should, by and large, be reasonably hedged, or they should borrow more in domestic currency rather than foreign currency.
There are so many problems in the E.U. that several countries are warming up to the idea that after the single currency, a deeper integration could also be created.
After the maxi yuan depreciation of 1994 and until 2005, exchange-rate fixity was the order of the day, with little movement in the CNY/USD rate.
The Chinese economy has huge potential and flexibility.
What there is no dispute about is whether or not China is a currency manipulator. They are a currency manipulator. They actively intervene every single day to keep the value of their currency less than it would be against the dollar than if it floated freely. We think. Even China barely disputes that.
We see China as a large market opportunity with similar cyclical economic cycles that occur throughout every economy.
No opposing quotes found.