Ministry of Commerce backs RMB rise

The Ministry of Commerce, responsible for promoting Chinese exports, has become one of the last remaining institutional lobbies to back further currency appreciation, the Financial Times reported. A think-tank attached to the ministry said, in a report published on the ministry's website, that a 3% appreciation in the yuan every year "will not have an obvious or apparent influence on the overall increase of China's trade". In the past, the ministry has claimed that a 3% appreciation would wipe out the profits of exporters operating on tiny margins. But the soaring trade surplus over the past 18 months, during which time the yuan has appreciated more than 6% against the US dollar, has made this position increasingly untenable. China's global trade surplus reached US$177.47 billion in 2006, up 77% year-on-year.