Yuan may see more flexibility

China may allow for currency flexibility if the trade surplus continues to expand, said Zhou Xiaochuan, governor of the People's Bank of China. "The data from 2006 show that China's trade surplus has been increasing, and if this situation continues, then I think the flexibility of the exchange rate will be increased," Zhou told Bloomberg during a regular meeting of central bank governors in Switzerland. China's trade surplus may have grown as much as 74% in 2006 to a record high of US$177.3 billion. According to Bloomberg estimates, a December surplus of US$21.6 billion, down from US$22.9 billion in November, may round out a record year. The annual surplus in 2005 was US$102 billion, more than four times the US$22.5 billion posted in 2001.