China’s State Council vows to keep yuan “basically stable”

BEIJING - As China continues to pool all efforts in pursuit of joining the IMF’s Special Drawing Rights system of international reserve currencies, an executive meeting of the country’s State Council presided over by Chinese Premier Li Keqiang has pledged to keep the yuan exchange rate “basically stable” in the wake of the stock market crisis and decreasing investor confidence.

While some economists are worried that the latest rout could lead to yuan devaluation, the Government says it will remain stable on a basis that the Government considers “rational and balanced”.

The pledge came amid a package of policies announced by the Cabinet which are designed to encourage exports and imports, such as expansion of the import of popular consumer goods, advanced technologies and key equipment parts; introduction of a pilot streamlined Customs procedure nationwide; and a reduction in trade company fees.

June saw a stronger-than-expected 2.1% year-on-year increase for exports, although two-way trade for the first six months of 2015 fell 6.9% to US$1.88 trillion, according to the General Administration of Customs.

Reported figures “fell well below” the Government’s official target of 6% growth in trade, implying the likelihood of China failing to meet its annual trade targets for the fourth year in a row. Despite this, the Government is confident that it will be able to meet the GDP annual growth target of 7% by the end of the year. www.webershandwick.cn (ATI).