China Seeks Flexible Currency Exchange Rate

China has lost faith in the stability of the U.S. dollar, and its first priority is to broaden the exchange rate for its currency from the dollar to a more flexible basket of currencies, a Chinese economist said at the World Economic Forum in Switzerland.

Fan Gang, director of the National Economic Research Institute at the China Reform Foundation, said the issue for China wasn’t whether to devalue the yuan but “to limit it from the U.S. dollar.”

The dollar hit a new low in December against the euro and has been falling against other major currencies on concerns about the ever-growing U.S. trade and budget deficits.