Ministry Of Commerce: Foreign Exchange Reform Will Enhance Export Enterprises' Competitiveness

The people's Bank of China announced recently that it should further push forward the reform of RMB exchange rate formation mechanism and enhance RMB exchange rate flexibility.

In response, Yao Jian, a spokesman for the Ministry of Commerce, said in an exclusive interview with Xinhua news agency in June 21st that the improvement of China's balance of payments situation has created a good foundation for the reform of the RMB exchange rate formation mechanism, and that the exchange rate reform will promote the competitiveness of our foreign oriented enterprises.

Yao Jian said that the balance of payments is the most important factor determining the trend of the RMB exchange rate.

Since last year, the RMB exchange rate formation mechanism has been in the process of continuous improvement. At the same time, China's trade structure has been constantly adjusted and improved, especially the trade surplus has been greatly reduced. Under such a background, the balance of the current account will be further improved, which has created a good foundation for the basic stability of the RMB exchange rate.

He said that the reform of the RMB exchange rate formation mechanism has many impacts on China's foreign trade enterprises. The rise in labor costs and raw material prices in the short term may make exporters face certain operational pressures, while the debt crisis in the euro area will also affect Chinese enterprises' exports to some extent. But in the long run, enterprises will continuously improve their competitiveness and further extend their value chain through continuous improvement of employment strategies and operational mechanisms, and provide conditions for such a value chain by extending the overseas marketing service network.

Yao Jian stressed that the Ministry of Commerce will pay close attention to the new problems and new difficulties encountered by export-oriented enterprises in their operation. I believe that after many efforts, Chinese enterprises can overcome some temporary difficulties, thereby enhancing their competitiveness in developing the international market in the future, and promoting the pformation of China's economic structure through the adjustment of foreign trade structure.