Chinese analysts on Friday said the government's decision to drop the currency peg to the U.S. dollar and revalue the renminbi (yuan) by 2 per cent was the start of a key reform but would have only a minor impact on the economy in the short-term, dpa reported "There will be some impact on the imports and exports of China and other countries," Yi Xianrong of the Chinese Academy of Social Sciences' International Finance Research Centre, told Deutsche Presse-Agentur dpa by telephone. "But as the fluctuation is relatively small, and there has already been long speculation on the revaluation of the renmibi, overall there will be not much influence," Yi said. A spokesman for the People's Bank of China, the central bank, said there would be "some short-term influence on economic growth and employment". China Construction Bank, one of China's four main commercial banks, quoted a top government economist as saying the reform would "help to maintain the stability of China's macro economy and financial market". "Many people worry about whether the revaluation of the yuan will have an impact on exports," Yao Yingyuan, chief economist with the National Statistics Bureau was quoted as saying. "But through this opportunity we can change the negative side of Chinese exports - the 'three highs and one low': high consumption of raw materials, high consumption of energy, high pollution, and low added value," Yao said. The change will also force some export-oriented enterprises to adjust their product structure and help China to reduce the risk of input-fuelled inflation, he said. In a commentary on Friday, the government's official China Daily newspaper said the reform was "indispensable in the country's pursuit of a more mature, sophisticated market economy". "By unpegging the renminbi from the U.S. dollar and linking it to a basket of currencies, the country has made a fundamental change in its management of an important aspect of its economy," the newspaper said. It said half-year economic statistics had shown "improved macro-economic conditions" that made the time right for currency reform. "The move is also partly in response to calls from the country's trade partners," it said, referring to growing complaints from U.S., Japanese and European politicians that China's undervalued currency made its exports cheaper. It said the reforms would also be "beneficial to the country's major trade partners and the stability of the world's economy". --mor 1237 Local Time 0937 GMT
