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China vows to keep yuan stable as investment slows

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China vows to keep yuan stable as investment slows Empty China vows to keep yuan stable as investment slows

Post by lexie Wed Oct 19, 2011 8:55 am

Oct 19, 2011 02:32 EDT

China vows to keep yuan stable as investment slows

China said Wednesday it would maintain a stable exchange rate and warned that foreign trade faced a "severe situation" in the coming months due to the West's economic woes.

The commerce ministry made the remarks as it released figures showing foreign direct investment in China slowed in the first nine months of the year as the contribution from US and European investors fell.

Commerce ministry spokesman Shen Danyang told reporters foreign trade would face a "quite severe" situation in the next two quarters, as the debt crisis in eurozone economies deepened and the United States struggled to grow.

He said the ministry and other relevant departments would "work hard" to maintain "stable export-related policies" including the yuan's exchange rate.

China is under intense pressure from the United States to let the yuan strengthen at a faster pace, with the US Senate last week approving a bill that would punish Beijing for alleged currency manipulation.

The controversial proposal has drawn a furious response from Beijing, and Shen reiterated that it "gravely violated international rules".

China took a total of $86.68 billion in foreign direct investment in the first nine months of 2011, up 16.6 percent from the same period last year, with Asian investors accounting for most of those funds, the ministry said.

That compares with growth of 17.7 percent in the January to August period.

In September alone, foreign direct investment rose 7.88 percent year-on-year to $9.05 billion, slowing from 11.1 percent growth in August and 19.83 percent in July.

The ministry said investment from "major Asian economies" continued to expand, surging 23.7 percent in the January-to-September period to $65.3 billion.

European and US investment fell in the same period, dropping 1.8 percent and 9.9 percent on year respectively to a combined $6.0 billion, it said.

Source: AFP Asian Edition


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