China's National People's Congress is usually a platform for the leadership to drive home a handful of key economic messages for the year. On China's controversial currency policy, however, this year's session of the legislature has demonstrated instead the divisions within the government that still remain.
Zhou Xiaochuan, governor of the People's Bank of China, used an appearance at the NPC to give the clearest indication in months that Beijing is preparing to abandon the peg to the US dollar it informally introduced in mid-2008. He told a press conference the currency peg was a “special measure” to help China weather the financial crisis. “These kinds of policies sooner or later will be withdrawn.”
After several months of tough talk from Beijing about not giving in to foreign pressure, amid accusations that its currency is undervalued, his comments were a significant shift in official rhetoric.