Chinese Prime Minister Zhu Rongji says strict foreign exchange rate controls protect the country's economy and its financial system.
In a statement carried by the official news agency, Xinhua, Mr. Zhu says it is in the best interests of the country to keep the renminbi's exchange rate at its current level. The currency is fixed at around 8.2 to the U.S. dollar.
The statement comes after months of complaints from businesses and government officials around Asia that China's exchange rate is too low, giving the country an unfair advantage in export trade. A weak currency makes a country's products cheaper, compared with the goods of countries with strong currencies.
Andy Xie is the chief China economist for investment bank, Morgan Stanley. He said China is not prepared for a freely trading renminbi. He said that is partially because its banks are not able to offer sophisticated investment products that allow companies to hedge their currency trading risks. "Over time, when China's financial sector is reformed, the domestic financial institutions can offer such products and help the companies to manage their finances well. Then, China can move truly toward a floating exchange rate. But that day is very far off," he said.
Elsewhere in Asia, Indonesian President Megawati Sukarnoputri is being criticized for raising prices for fuel, electricity and telecommunications services. Last week. the government increased fuel prices by 22 percent, electricity by 6 percent and telephone rates by an average of 15 percent.
Opposition politicians, labor unions and student groups argue the increases are too large and will hurt the struggling economy. However, the Indonesian news media reports the president is standing firm on the decision.
In the Philippines, the government reports the inflation rate for 2002 was 3.1 percent. That figure was well below the target of around 5 percent and comes after years of government effort to constrain high inflation.