BEIJING (Thomson Financial) - A top Chinese official said Wednesday that China is supporting a stronger US dollar and that a sharp appreciation in the local currency, the yuan, would not be in anyone's best interest.
Speaking to reporters during the Strategic Economic Dialogue, the Vice Minister of Commerce,
Chen Deming, said a rapid strengthening of the yuan would "cause repercussions" in China and around the world, and that it would not necessarily lead to a faster reduction of the US's trade deficit with China.
Chen noted that the yuan has already increased in value by more than 11 percent against the dollar, but the US trade gap with China has still grown.
Meanwhile, Chinese Finance Minister Xie Xuren said China's sovereign wealth funds would
operate transparently and would seek long-term investment returns. Xie did not answer specifically whether China supports US efforts to bring greater transparency to the operation of these funds to
ensure they are not used for political purposes.
However, Xie did say China attaches "great importance" to exchanging views on this issue with other governments, adding that China's sovereign funds would follow all laws of recipient countries when investing overseas.
The US proposed in October that International Monetary Fund members work out guidance for sovereign wealth funds (SWFs) to ensure that they focus on investment returns rather than political objectives, and argued that greater transparency in their operation would put many countries at ease.
Read more:China wants stronger dollar, says rapid yuan rise may cause repercussions UPDATE
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