SCIO briefing on China's commerce development in 2015

Bloomberg News：

Minister Gao, could you comment on whether there is any need for further devaluation of RMB in order to help the beleaguered manufacturers and exporters?

Gao Hucheng:

First of all, I don't think sharp devaluation or appreciation of RMB is beneficial to importers or exporters. Nowadays with in-depth development of economic globalization, all well-known transnational enterprises and leading enterprises of various industries allocate their production factors on a global scale. Let me give you an example about a traditional Chinese industry. Recently a big clothing manufacturer in China, in cooperation with some other domestic enterprises, established a clothing industrial park in a country in South Asia with an investment of more than 13 billion yuan (about US$1.99 billion). In two or three years, the park's annual export of clothing products is expected to reach 5 billion US dollars with 200,000-300,000 people to be employed. This enterprise has precisely allocated its resources on a global scale. China's labor costs mean the traditional clothing industry is no longer competitive. However, Chinese equipment, technology, funds, management skills, raw materials and accessories in this industry do still have competitive advantages. Therefore, according to the general theory, against a background of in-depth global economic integration, currency devaluation or appreciation, if not exceeding 10 percent, will have very little impact on trade. So, I don't think some fluctuations in the central parity quotes of the RMB exchange rate we have seen recently will have a great impact on trade. Thank you.