China Won't Devalue Its Currency Despite Effects of Yen's Weakness
By I-Chun Chen and Peter WonacottDow Jones Newswires
BEIJING -- Although the weakening yen has hurt China's exports and foreign-investment inflows, Beijing won't devalue its currency, central-bank Gov. Dai Xianglong said.
"The depreciation of the Japanese yen is having a very negative impact on Chinese imports and exports and the utilization of foreign capital," the People's Bank of China's Mr. Dai told participants at a private symposium on the Asian financial crisis. The central bank provided a copy of Mr. Dai's speech to Dow Jones Newswires.
The weakening yen may also place pressure on China's economic reforms and restructuring. But Beijing is committed to holding the yuan stable, Mr. Dai said, echoing pledges made by other top Chinese officials.
"Our state leadership has already made it repeatedly clear that the yuan will not be devalued. I think you should believe in such statements," Foreign Ministry spokesman Zhu Bangzao told a regular briefing Tuesday.
'China Can Stand the Cost'
Other Chinese leaders have said the government will keep the yuan exchange rate firm despite the economic pain from slower exports and shrinking foreign investment.