WTO asks China to change currency policy

WTO asks China to adopt a more flexible currency exchange rate policy and must do more to stamp out piracy.

China should adopt a more flexible currency exchange rate policy and must do more to stamp out piracy, the World Trade Organisation will report in its first trade review of the Asian country, according to a summary obtained on Friday by The Associated Press.

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The WTO's trade review, scheduled for release on April 10, will praise China for economic reforms made over the last three decades, which have helped cut by over half the amount of Chinese living in poverty and increased gross domestic product per capita nine-fold.

Commitments made by China to join the WTO in 2001 "have provided a catalyst for reform, paving the way for continuing strong growth in the foreseeable future," the global commerce body said in the summary.

But "a number of challenges remain," the WTO said, citing China's currency policy, protection of intellectual property rights and slow liberalisation of key service sectors such as banking and telecommunications.

The report makes no mention of a recent thaw in trade hostilities between China and the United States, which has been bogged down by Washington's $202 billion trade deficit with the Asian country and has centered on the valuation of the Chinese yuan.

According to the WTO, "the move to a more flexible exchange rate could enable China to operate a more independent monetary policy and allow the market to play a greater role in determining interest rates and therefore in allocating resources.