BEIJING, June 30 (Reuters) - China needs to keep the real effective exchange rate of the yuan stable to promote exports, which have been hit hard by plunging world demand, an official at the Commerce Ministry said in remarks published on Tuesday.
The government should also work towards fully refunding export taxes and improve credit and insurance support to export firms, said Wang Zixian, the deputy director of the ministry's policy research office.
"We need to rely on both domestic and international markets to realise steady and fast economic growth," Wang was quoted as saying by the official Financial News.
Wang said sliding exports will exacerbate unemployment, blunting the government's efforts to boost consumption.
Beijing has pinned the nominal rate of the yuan
However, because the U.S. currency strengthened considerably in the second half of last year, the yuan has also appreciated in effective terms when measured against the currencies of China's trading partners. It has been surrendering some of those gains in recent months as the dollar has weakened.
Chinese exports, which have been an important engine of growth in recent years, fell 21.8 percent in the first five months from a year earlier.
A recovery in exports could alleviate industrial overcapacity, thus preventing a further fall in prices and helping to improve consumer sentiment, Wang added. (Reporting by Aileen Wang and Alan Wheatley; Editing by Ken Wills)