One of the most infuluantial voices in making China’s economic policies said  that  “China did not need to accelerate the appreciation of the renminbi against the US dollar, according to an article published in the Financial Times.

The main point needs to be highlighted in the article is:

- China doesn’t need appreciation of Renminbi anymore because the Dollar will not weaken very much, and may get stronger.

The Chinese currency has appreciated by 7 per cent against the US dollar this year. But the pace of appreciation has slowed sharply over the last two months. In August, the renminbi even depreciated slightly against the dollar. This is only the second month that this has happened since China moved away from its dollar peg in 2005.

This year, China’s trade surplus is decreasing, but foreign reserve accumulation is increasing.

According to the FT, Mr Cheng Siwei, vice-chairman of the standing committee of National People’s Congress, warned that the strength of domestic consumption could not compensate for the weakness of investment and net exports. Although the government had introduced measures in July to loosen credit and reduce export taxes, “we need to consider fiscal policy action as well”, he said.

“Government revenue in-creased by 33.3 per cent in the first half of this year. But we have many big expenses like the Olympics and the aftermath of the earthquake. So I don’t think we can put a big sum of money to expand public spending. But we have put Rmb3.5bn ($512m) into subsidising small and medium-sized enterprises.”

You can read the original article: “Renminbi rise ‘less necessary’” By Martin Wolf in London and Geoff Dyer in Beijing.