Division over currency peg revealed during National People's Congress

Senior Chinese officials appear divided over the issue of renminbi revaluation following comments by the country’s top banker to the National People’s Congress, the Financial Times reported. Zhou Xiaochuan, governor of the People’s Bank of China, told the NPC that the currency peg to the dollar, which was formally introduced in 2008, was a "special measure" and that "these kinds of policies sooner or later have to be withdrawn." Zhou’s comments follow months of claims by China’s leaders either that the renminbi is not undervalued, or that they will not give in to foreign pressure over their currency issues. ”This is the most explicit comment on the renminbi’s exit from current de-facto peg made publicly by top Chinese policymakers so far,” said Qu Hongbin, chief economist for China at HSBC. Zhou’s comments seem to contradict those of Premier Wen Jiabao, who repeated his views on Friday that the renminbi would remain "basically stable" and Commerce Minister Chen Deming, who said at the weekend that a full recovery of China’s export market would take two or three years. Chen said that any change in currency policy would be "gradual and controlled."