Banking News
- Rising costs to reduce surplus
Date: 14-Dec-2007 Sources: (Shenzhen Daily)
RISING labour and energy costs would help China reduce its overall balance of payments surplus, Zhou Xiaochuan, governor of the People's Bank of China, the country's central bank, said Thursday.
Higher input costs increase a country's real, or inflation-adjusted, exchange rate, thus dampening demand for exports and making imports cheaper. But Zhou said reforms to liberalize Chinese energy prices did not mean that China would refrain from a move on the yuan's nominal exchange rate. He did not elaborate.
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