MercoPress. South Atlantic News Agency

China fuels currency uncertainty.

The evolution of the Chinese Yuan, linked to the United States dollar, and several statements from different Beijing officials are causing concern in international currency markets.

Early this week Li Deshui, head of China's Statistics Office stated that "this is not the moment to modify the Yuan's exchange rate", in reference to mounting international pressure on Beijing to let its currency float.

A weakened US dollar makes Chinese exports worldwide cheaper causing trade balance rifts with many partners particularly with United States that faces mounting deficits with China.

However Mr. Li Deshui comment was followed by promises from the Finance Ministry International Department head Zhu Guangyao who anticipated that China "will hold in depth discussions" about its monetary policies during the G 7 meeting that will be meeting next February 4/5 in London.

To further complicate, Fan Gang Director of the National Economic Research Centre in Beijing said that "in our opinion the US dollar can no longer be seen as a stable currency since it constantly depreciates and therefore is a permanent source of problems".

Mr. Fan Gang said he believed the Yuan should cut off from the US dollar and be linked to a basket of currencies, as was the case until 1994.

The Chinese economy last year managed to expand over 9% and in 2004 China became the world's second trade power behind United States.