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The revaluation RMB will push the price drop in auto and housing sectors, and thus, benefits the consumers. That's the view of an expert from the country's top think tank, the Developments Research Center of the State Council.
The expert says, the 2 per cent RMB revaluation, in theory, will depress the prices of imported steel, oil, and other imported raw materials, and thus, force the prices of commodities drop. On the other hand, a flexible exchange rate mechanism will discourage the speculation on property, as it has become more risky.
Director of Finance Institute of Development Research Center of State Council Ba Shusong said, “If the exchange rate goes up continuously, the exporting business of raw materials or preliminary processed goods will be gradually washed out. In this way, the revaluation can help the readjustment of industrial structure.”
Ba Shusong also called for proper tax policies for accelerating the readjustment.
(CCTV August 10, 2005)
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