Chinese Premier Wen Jiabao said Sunday China must uphold the principles of independent initiative, controllability and gradual progress in pursuing RMB exchange rate reform.
"By 'independent initiative,' we mean to independently determine the modality, content and timing of the reform in accordance with China's needs for reform and development," said the premier when addressing the opening ceremony of the Sixth ASEM Finance Ministers' Meeting, held in Tianjin, a port city in north China.
In the exchange rate reform, the premier said, China should take account of its possible impact on the country's macro-economic stability, economic growth and job market, give consideration to the state of the financial system, the level of financial regulations, resilience of the enterprises and effect on foreign trade and keep an eye on the economic and financial performance of the neighboring countries and regions, and of the world as a whole.
"By 'controllability,' we mean to properly manage the changes in RMB exchange rate at the level of macro-regulations. We must push forward the reform but always stay on top of the challenges, so as to prevent fluctuations in the financial market and economic instability."
"By 'gradual progress,' we mean to push forward the reform in a step-by-step manner. We must take into consideration both the present needs and the future development and guard against undue haste."
"In short, we need to continue improving the RMB exchange rate forming mechanism and develop an exchange rate system that is more market-oriented and more flexible."
However, the premier said, since this reform involves a wide range of areas and will have a far-reaching impact, it still requires a great deal of preparation to help create an enabling environment for all sides to sustain the possible impacts.
Such a responsible attitude and practice of China will contribute to the stability and development of not only Chinese macro-economy but also the economy of the surrounding countries and the larger world, the premier said.
