BEIJING (Kyodo) Finance Minister Sadakazu Tanigaki called on China Saturday to inject more flexibility into its currency regime, saying such a move would work in China’s interest.
“I welcomed last year’s reforms (and told Chinese Finance Minister Jin Renqin) that reform for further flexibility in its currency regime would be in China’s interest,” Tanigaki told a news conference.
Tanigaki made the comment after a one-day meeting between officials of the two countries’ finance ministries in Beijing.
Beijing unshackled the yuan from a tight peg to the U.S. dollar last July, linking it to a basket of foreign currencies instead.
While the yuan has risen about 3 percent since then, critics including U.S. lawmakers and businesses say the rise is too small and that China still enjoys unfair trade advantages.
“I welcome the fact that the yuan’s exchange rate has been moving in a relatively big way, but daily movements since the introduction of the new system have been limited,” Tanigaki added.
The talks come at a time when China’s economy is continuing to grow at a torrid pace. The Chinese economy expanded 9.9 percent in 2005 after easing off only slightly from the double-digit growth seen in recent years.
Japan’s economic outlook, meanwhile, has brightened after more than a decade of stagnation. Growth for the October-December period came to an annualized 5.4 percent, making it likely Japan will reach its target of a real 2.7 percent growth in fiscal 2005 ending March 31.
Despite the chilly political front, economic ties with China have flourished. China has surpassed the United States as Japan’s biggest trading partner, with two-way trade reaching 24.949 trillion yen in 2005, up 12.4 percent from a year earlier.
Japanese officials admitted Saturday’s event had political implications.
“This is a part of the governments’ efforts to maintain contact in various sectors and on different levels” especially at a time when their leaders have been unable to hold talks because of soured ties, a Japanese diplomat in Beijing said.