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China yuan decision hinges on employment -c.bank adviser

Published 03/25/2010, 08:00 PM
Updated 03/25/2010, 08:04 PM

BEIJING/SHANGHAI, March 26 (Reuters) - China could move again to greater flexibility in its currency regime, but needs to take domestic factors such as employment into account when deciding whether to do so, a central bank adviser said in remarks published on Friday.

Fan Gang, an academic member of the People's Bank of China's monetary policy committee, wrote in an article in the English-language China Daily that a rise in the yuan itself was not a solution for U.S. economic problems including employment.

"China may resume a 'managed float' of its exchange rate, particularly if the uncertainty of the overall post-crisis economic situation diminishes," Fan wrote.

"In choosing whether or not to do so, its policymakers may weigh factors ranging from China's international responsibilities to the potential damage of foreign protectionism or even a trade war.

"What is certain, however, is that China's politicians have a domestic agenda just like the Americans. The key element of that agenda is to maintain employment growth." (Reporting by Jason Subler and Tom Miles; Editing by Jonathan Hopfner)

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