Yangzijiang Shipbuilding Chairman: “There’s no reason for the yuan to appreciate”
SINGAPORE (Dow Jones)–The chairman of Yangzijiang Shipbuilding Holdings Ltd. (BS6.SG) said Thursday he doesn’t expect the yuan to appreciate more than 5% against the U.S. dollar over the next two to three years, predicting the dollar to stay in a range of CNY6.0 to CNY6.3 during that period.
Ren Yuanli, who holds a 27.9% stake in Yangzijiang, China’s largest publicly listed, non-state-owned shipbuilder, said if China’s trade surplus is shrinking, “there’s no reason for the yuan to appreciate.”
China’s current-account surplus, the broadest measure of China’s global trade surplus, fell to around 2.7% of gross domestic product in 2011, its lowest ratio in nearly a decade.
Ren said he expects China’s economy to avoid a hard landing–or a sudden and dramatic decline in economic conditions–and that the authorities won’t make any drastic changes to economic policy until a leadership transition slated to begin later this year is complete.
“Until the first half of 2013 there will be no major policy changes because of the transformation of the government, so basically the government will maintain the status quo up until then,” he said.
Ren said he believes the U.S. economic recovery “is real” but that the euro-zone debt situation remains unresolved. Even if a solution is found, he said, it doesn’t necessarily mean the economy there would pick up.
Earlier Thursday, Yangzijiang posted a 24% rise in fourth-quarter net profit to CNY1.04 billion ($165.1 million), as the builder of containerships and bulk carriers delivered vessels secured at higher prices before the global financial crisis.
The group has a current orderbook of US$4.7 billion and said the euro zone’s debt troubles won’t affect orders on hand. New orders from Europe may take a hit, however.
“A lot of owners want to place orders [for ships] but they have difficulty in finding financing,” Ren said.
-By Matthew Allen, Dow Jones Newswires
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