中国汇率政策将"回归常规"

There may be guarded optimism, albeit not yet celebrations, in the US following the latest – and most direct – hint that China's currency is set to appreciate.

The country's central bank chief described the current dollar peg as a temporary measure, laying the groundwork for a “return to ordinary economic policies”. Such a move could address global trade imbalances.

Keeping the renminbi pegged to the dollar at an artificially low level – as the Americans claim – has widened the gap between what China pays and what it spends, by making exports cheap and imports expensive.

This current account surplus has been a thorn in the side of developed economies struggling to rebuild their exports.

Since July 2008, when the peg was set at 6.83 RMB per dollar, calls for currency appreciation have been increasing in number and intensity.

Americans have been at the vanguard of such requests, resisted by the Chinese as they seek to safeguard their economic recovery.

But it might be misleading to think China is suddenly responding to international pressure.

Fears of inflation and asset price bubbles offer a possible alternative explanation for the change of heart.

As Janet Yellen, San Francisco Federal Reserve chief, pointed out in February, the dollar peg means that the Chinese government is effectively stuck with the inflationary effects of US monetary policy.

Chinese prices are expected to have risen 2.3 per cent in February, year-on-year. This was the median estimate of a Reuters poll of consumer price inflation, in which forecasts ranged from 1.9 to 3.5 per cent.

Meanwhile, the Chinese central bank has adopted several measures recently to discourage exceptionally high levels of lending.

The value of property sold in 2009 rose 75.5 per cent from the year before, representing just 42.2 per cent increase in actual floor space sold.

In addressing trade imbalances, an appreciation of the renminbi is equivalent to rising inflation: either or both can be used to raise the domestic cost level relative to international levels.

This increases the price of Chinese exports and reduces the trade surplus.

Inflation would be the more discreet way to achieve this end. But it would erode the value of substantial stocks of private and public savings.

The hint from the central bank governor, Zhou Xiaochuan, may be the most important in a number of recent rumours.

On February 26, the Chinese newspaper the 21st Century Business Herald reported stress tests being carried out to gauge the effects of a strengthened yuan on earnings in labour-intensive industries.