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China won't devalue yuan to boost exports-minister

Published 12/23/2008, 08:42 PM
Updated 12/23/2008, 08:45 PM

BEIJING, Dec 24 (Reuters) - China will not devalue its currency to boost exports, Minister of Commerce Chen Deming said in an interview published in the official People's Daily on Wednesday.

Chen made similar comments during the China-U.S. Strategic Economic Dialogue earlier this month.

"With shrinking demand in overseas markets, the role of the exchange rate in stimulating exports will be limited -- it is a measure not worth taking," Chen told the paper.

Currencies of China's Asian neighbours are falling, but Chen said China would keep the yuan stable.

"Recently, currencies of some countries have depreciated significantly, but their exports continued to slide," Chen said.

"China will not rely on yuan depreciation to boost exports," Chen said.

China's exports unexpectedly fell 2.2 percent in November, marking the first fall in seven years, but Chen said the drop was in part attributable to one-off factors, including new tax rebate measures slated for December.

"New tax rebate measures will come into effect on Dec. 1, and many companies have deliberately delayed shipments," Chen said.

The trade minister said demand for Chinese products could weaken further amid a global economic recession, and Beijing would take additional measures to aid its export sector.

"To maintain stable exports growth, China has to further improve its policy support system," Chen said. He mentioned export tax rebates and processing trade but did not elaborate. (Reporting by Zhou Xin; Editing by Kazunori Takada)

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