China opens door to G20 discussions on yuan

Sat Jun 26, 2010 6:10pm EDT
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By Simon Rabinovitch

TORONTO (Reuters) - Chinese officials, in an abrupt change of emphasis, said on Saturday they welcomed discussions about currencies as part of global economic talks, but insisted Bejing alone should determine policy on the yuan.

Their openness at the Group of 20 summit in Toronto to allow at least some discussion about exchange rates represented a softer line than in recent weeks.

Beijing had said previously that debate about the yuan had no place in international forums.

But the officials, a parade of department heads from the central bank, the commerce ministry and a powerful central planning agency, also tried to shift the spotlight away from the currency, saying it was only a small piece in the bigger puzzle of how China would cut reliance on exports.

"As for pressure on the exchange rate issue, I think to be precise we should call it exchange rate-related discussions," Zhang Tao, a director-general with the People's Bank of China, told a news conference at the start of the G20 summit of wealthy and emerging nations.

"The G20 is for discussing macro-economic issues of mutual interest and this, of course, includes exchange rates," he said. He said China felt neither more nor less pressure about the yuan at this G20 compared with previous summits.

After weeks of calls from Washington and others for China to let its currency rise, Beijing said a week ago that it would end a de facto peg of the yuan to the dollar that had been in place for nearly two years.

A draft communique from the G20 summit welcomes China's move to make its currency more flexible and its efforts to boost domestic demand, a G20 official said.   Continued...