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November 30, 2009

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Home » Business » Economy

Wen pledges to continue yuan on path of flexibility, stability

PREMIER Wen Jiabao said yesterday China would continue to enhance the flexibility of the yuan exchange rate.

China had maintained stability in its currency, making a vital contribution to global financial stability and economic development, he said.

Wen made the remarks at a key meeting with three Eurogroup leaders in Nanjing, capital of east China's Jiangsu Province.

He was speaking with Eurogroup President and Luxembourg Prime Minister Jean-Claude Juncker, European Central Bank President Jean-Claude Trichet and European Union Economic and Monetary Affairs Commissioner Joaquin Almunia ahead of the 12th China-EU summit beginning in Nanjing today.

Wen said China would, acting on its own initiative and in a controllable and gradual manner, keep the yuan stable at reasonable, balanced levels.

Juncker said the EU was willing to strengthen coordination with China on monetary policies.

The four leaders also appealed that countries should not make an "early withdrawal" from their economic stimulus packages as they were needed to maintain the global economic recovery.

"An early withdrawal would lead to a loss in what we have achieved," Wen said.

Juncker also revealed during the talks that the EU had not yet started to withdraw the stimulus packages.

"The moment has not yet arrived for withdrawing the stimulus packages for both China and the EU," he told a press conference after the meeting with Wen.

The announcement came amid worldwide controversy over a second wave of financial turmoil, as the Dubai debt crisis brought shock to the world's stock markets.

"For the Euro area, there will be no major withdrawal of stimulus measures in 2010," Juncker said.

China announced on Friday that, after launching a 4 trillion yuan (US$585.9 billion) economic stimulus package, it would continue its proactive fiscal policy and moderately easy monetary policy next year.

China's economic growth has approached its pre-crisis level a year after the adoption of the stimulus package.

The country's economy grew 8.9 percent year on year in the third quarter, accelerating from 7.9 percent in the second quarter and 6.1 percent in the first quarter.

Continuity in China's stimulus package was "in the best interests of both Europe and the world," said Juncker, who supported Wen's appeal.


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