Department of Commerce proposed to slow the appreciation of RMB

Official sources, a letter to the Ministry of Commerce of the State Council

Last week, the Commerce Department to report to the requirements of the State Council in the first half of this year's foreign trade situation and put forward policy recommendations. Yesterday, an official source disclosed that the Ministry of Commerce of the State Council has formally proposed to slow down the pace of RMB appreciation, at the same time improve the clothing, toys, footwear export tax rebate rate to prevent the emergence of the significant downturn in exports.

In its recommendations, the Ministry of Commerce said exporters need more time to adjust, otherwise many businesses will close down.

Customs data released last week showed that in the first half of this year, China had a trade surplus of 99,030,000,000 U.S. dollars for the same period last year dropped 11.8 percent, a net reduction of 13,210,000,000 U.S. dollars. June China's total exports 121,530,000,000 U.S. dollars, representing a 17.6 percent increase over the same period last year, the growth rate is much lower than May's 28.1 percent. By the RMB against the U.S. dollar this year 6.6 percent rise in the first half, and other factors, in the first half this year, Chinese textile industry exports slowed down significantly, many enterprises on the verge of collapse. Vice Minister of Commerce Gao Hucheng said Monday, will be the right time to introduce policy support to help the problems of the textile export industries. Gao said the first half of this year, with the changes in the international market economy, as well as the impact of the RMB exchange rate to the textile industry as represented by some of the export business problems. The Commerce Department is actively research, will be the right time to launch the policy. This shows that the official assessment is a result of increasing appreciation of the yuan led to some difficulties in export industries, in the future or to be taken by the relevant measures to help companies ride out the storm.

Industry, said: "revaluation of the RMB is expected to promote the international floating capital in 2006 via a false start in trade, investment and underground channels such as flow into the Chinese domestic, not only will China's stock market once the real estate market and pushing up prices to completely irrational High, as well as some of the turns to promote agricultural and industrial products, such as commodity prices continue to soar, leading to serious inflation, but also lead to liquidity run wild. "