CHINA ruled out allowing the yuan to float freely on the markets after a meeting in Washington with policymakers from the United States.

　　“Personally speaking, I think full liberalization will be a direction of our future effort,” Finance Minister Xiang Huaicheng said after the annual meeting Monday.

　　“However, in the foreseeable future it is impossible to fully liberalize,” Xiang told reporters in a joint press conference with U.S. Treasury Secretary Paul O’Neill.

　　China’s policy was to maintain a managed, market-oriented currency based on supply and demand, he said.

　　China had adopted a managed exchange rate regime since 1994, Xiang said. “During this time, the yuan exchange rate has been kept very stable,” he said.

　　The yuan is virtually pegged to the U.S. dollar and there are tight controls on foreign exchange.

　　China received kudos for its refusal to devalue its currency during the Asian financial crisis in the late 1990s, when other countries in the region engaged in competitive devaluations.

　　O’Neill and Xiang each led their countries’ delegations at the 15th gathering of the U.S.-China Joint Economic Committee. Talks centered on the economy and the fight against terrorist finances.

　　Prospects for the global economy had improved since their last meeting, they said in a joint statement.

　　In the United States, growth had resumed, inflation was low and the fundamentals were sound, the statement said.

　　“The U.S. side emphasized that fiscal and monetary policies are in place to support the economic expansion, including a corporate responsibility act to punish corporate fraud and protect investor rights,” it said.

　　In China, the economy was growing steadily and investment flows were strong.

　　“The Chinese side explained that strengthening domestic demand, accelerating economic restructuring and China’s integration with the global economy are fundamental for sustained macro-economic success.” (SD-Agencies)