No basis for renminbi to devaluate over long term

BEIJING - The recent relative volatility in the exchange rate of Chinese currency renminbi should be viewed from a longer-term perspective and put in the larger context of China's market-based financial reforms.

There is simply no basis for the renminbi, or yuan, to devaluate over the long term as the Chinese economy has been robust. The slowdown in economic growth is justifiably within expectations of decision-makers even though it had surprised some of the players on the market.

The Chinese economy grew by 6.9 percent last year, slower than the growth recorded in the previous years, but it is still at quite a high level.

"Most countries would envy a 6.9 percent growth," Microsoft founder Bill Gates said at the World Economic Forum in Davos, Switzerland recently. "I have a lot of confidence in China, partly because they take a long-term view, and partly because they look what other countries are doing."

China has been restructuring its economy, and the government encouraging innovation, pushing through reforms by streamlining procedures and making it much easier to register new businesses in the country.

Besides, China has a respectable domestic market and sharp technological edge in manufacturing, as industry players put it.

Aside from its enviable domestic market, the Asian country boasts huge demand yet to be tapped, as most of its flourishing cities, often with a population of millions or hundreds of thousands, are still in need of substantive investment in infrastructure and environment protection.

As for the labor market, "people can easily find jobs if they are not lazy," an international student at a university in eastern China said on a popular social media platform, citing it as one of the best things about the country.

China recently announced plans to reduce overcapacity in sectors such as coal, steel and cement, obviously aware that the workers to be laid off won't be a threat. Arrangements have been made to help them through the difficulties after losing their jobs in the forthcoming change.

Back to the currency, China does not have a policy to devaluate the yuan over the long term. China, as a responsible player, has promised not to carry out competitive devaluation to stimulate its export. This is a commitment. Take a look at the track record of China.