Beijing hints at renminbi revaluation at Davos

Beijing will consider revaluing the renminbi when stimulus packages are withdrawn in other nations, the South China Morning Post reported, citing comments made by Zhu Min, deputy governor of the People’s Bank of China, in Davos. Zhu told the World Economic Forum that China had maintained the renminbi exchange rate over the past two years as a stimulus package, but that the country was willing to reconsider to help the world avoid economic downturn. "If global [partners are] ready to do exit strategy, China is ready … including various issues – liquidity issue, exchange issue," he said. Meanwhile, in an interview with Reuters, Zhu also said that China’s central bank will step up its efforts to rein in lending in 2010 to ensure that the country’s economy does not overheat. "We are very carefully managing loan growth this year to slow down the path of loan growth and to make sure that investment will be at a smooth level to avoid overheating," he said. He added that Beijing is reluctant to use the term "control" when talking about lending, because banks are commercial entities; the central bank simply wants loans to grow smoothly, he said. New loans in China amounted to US$212 billion in the first 19 days of January.