Even though expectations are high that the Chinese government will change its policy to allow more flexibility in the currency rate, external factors are now complicating the decision, the New York Times reports:
China has spent several trillion renminbi over the past 21 months to prevent its currency from rising against the U.S. dollar. American lawmakers have become increasingly critical of the policy, complaining that it keeps Chinese exports artificially cheap.
The Chinese news media, which have far more freedom to report on economic issues than political ones, have framed the currency issue mainly in terms of protecting Chinese sovereignty. That has prompted a series of assurances by Chinese officials over the past four days that China will not be pushed by foreign pressure into doing anything against its own interests.
President Hu Jintao told President Barack Obama in Washington on Monday that China would set its currency policy according to its own social and economic development needs, according to Xinhua, the official China news agency.
