This floating range can be expanded in terms of the future development, but it has to be based on the actual situation both at home and internationally.
instead of transferring various risks to the government, as they did under the fixed-exchange regime.
We will have decontrol of interest rates and foreign exchange.
We need to look at domestic and international needs.
China's major trading partners are the United States, the euro land, Japan, Korea, etc., and naturally, U.S. dollar, euro, Japanese yen and Korean won become major currencies of the basket.
but the important thing is that it has started to float and over time market forces will play a more and more important role.
At the same time, international capital is rather mobile, and China's economic system is still not able to withstand sudden and disorderly adjustments.
We don't worry too much what other people say.
Our investment demand has been very strong for several years, so we are now trying, to some extent, to slow down investment and enhance the household consumption demand to improve the economic structure.
Otherwise, in two or three years' time, once domestic consumption loses steam, there will then be a lot of pressure around issues such as the exchange rate and trade friction.
The foreign exchange reserves are still growing. Some people are concerned that the amount of U.S. dollar assets in the reserves will fall. But that's not the case.
These kinds of noises cannot change the various fundamental conditions and sequencing of China's exchange rate reform. They only interfere with the normal reform process.
It will depend on how big an impact the case has on the bank's overall strength.
In particular, the developed countries, while enjoying low-cost imported goods and services, have to restructure their industrial sectors quickly to create job opportunities and export advantages to improve their competitiveness and dampen protectionism.
The currencies in the basket depend on the amount of foreign trade we conduct. The U. S., euro zone, Japan and South Korea are our biggest trading partners now. Hence, their currencies are naturally the main ones in the basket.
Chinese companies are now looking more and more at global competition.
In the 1980s, Chinese companies tried to get out of the traditional, centrally planned economy and become market players. In the 1990s, many Chinese companies tried to restructure their company structure, to have ownership diversification, to go public domestically or internationally, and then to learn to set up new corporate governance. And after that, I think Chinese companies are looking more and more to the global competition.
I think it's very clear that China is introducing a new exchange rate mechanism. It is not a one-time adjustment.
What the premier said means that China would continue to increase the flexibility of the RMB exchange rate in a gradual manner.
We know the U.S. has pressures -- employment issues and elections and the credibility of the government. For China, we could also say that the current state is not only good for China but also for the rest of the world and also good for the U.S. because we are using our foreign exchange reserves to buy U.S. Treasury bonds and subsidize U.S. consumers.
China has undertaken several reforms related to the safety net, healthcare reform, pension reform, education reform in the hope to reduce precautionary savings.
We reckon China may need two to three years to achieve a basic balance in international trade.
We should find a balance between opening the market and (national) security issues not every financial sector is sensitive.
Global trade, settlements and reserve assets are heavily reliant on a single currency. The fund should give priority to establishing a surveillance and check-balance mechanism of the major reserve currency countries.
We will not bow to pressure from other countries to change our policies, but we will still pay attention to every issue in the global economy.
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