China's Stable Currency Plan

27 December 2006

BEIJING: The People's Bank of China says it will keep the value of its currency at a stable level and will act to curb investment growth.

A new statement from the country's central bank says it believes "that China should . . . actively expand domestic demand, reasonably control the growth of investment and improve the trade balance".

US politicians and business leaders will welcome the sentiments but will be frustrated at the lack of detail and timing. The trade deficit with China is on track to hit $229 billion (€174bn; £116bn) this year, up from last year's record $202bn.

Chinese leaders say they want to encourage domestic consumption to reduce the country's dependence on export-driven manufacturing industries and investment, but retail sales and other measures of consumer spending are growing much more slowly than exports.

Data sourced from; additional content by WARC staff