China Widening Yuan Band

Move shows government’s confidence in strength of economy.

China’s doubling of the yuan trading band signals official confidence in the strength of the economy’s expansion and suggests policymaking is unimpeded by the ouster of Bo Xilai from the Communist Party leadership.

The change that takes effect today “adds to my confidence in a soft landing,” said Jim O’Neill, who is chairman of Goldman Sachs Asset Management in London and coined the acronym BRIC for Brazil, Russia, India and China.

Investors’ Concerns

The central bank’s move “does suggest that they are not as concerned as sharemarket investors are about the prospect of a hard landing,” said Shane Oliver, Sydney-based head of investment strategy at AMP Capital Investors Ltd., which has more than $100 billion under management.

Tensions With U.S.

President Barack Obama’s administration says Beijing still keeps the exchange rate artificially weak, hurting American manufacturers and contributing to a U.S. trade deficit with China that rose 8 percent to $295 billion last year.

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