China's decision to reform the Renminbi exchange rate will increase the competitiveness of its exports on the global market.
The Ministry of Commerce says the move could increase pressure on China's export businesses in the short term, with likely higher material costs. Rising labor costs and the debt crisis in Europe might also affect China's exports. But in the long run, the reform will help improve business management and increase international trade.
The central bank said on the weekend that it would increase the flexibility of the exchange rate. The ministry says the large decline in China's trade surplus has provided a good basis for reform of the yuan exchange rate.