According to the central bank's 2002 report on the implementation of the monetary policy, the low-level operation of China's commodity price will not affect the global price dramatically. The commodity export of China accounts for only 5 percent of the global total, and the rate drops to around 2percent when the volume of processing trade is deducted. The low rate will not exert any decisive influence on the global price level. The current RMB exchange rate tallies with China's national conditions.

       According to the 2002 report on the implementation of the monetary policy recently released by the People's Bank of China, China will continue to maintain the stability of the interest rates on Renminbi (RMB) savings deposits and loans. This year, long- and medium-term plans will be formulated for the market-oriented reform of interest rates on the basis of experiences summarized from the reform since 1996. Further studies will be conducted to unity the policies and measures on enlarging the floating range of interest rates. Experience of pilot projects in the reform of interest rates at rural credit cooperatives under the county level will be summed up, in order to promote the steady development of rural financial service.
   
       In 2002, the People's Bank of China, by flexibly applying the means of interest rates, steadily pushed forward the market-oriented reform of interest rates, In early 2002, rural credit cooperatives in eight counties launched pilot projects for the reform on the basis of two enlargement of the floating range for the interest rates of loans in 1998 and 1999. The floating range for the interest rates of loans was increased from 50 percent to 100 percent, and the maximum floating range for the interest rates of savings deposits was raised to 50 percent. In September 2002, the scope of experiment was expanded.
   
       According to the report, by the end of 2002 the non-performing loans of the four state-owned commercial banks was reduced by 78.2 billion yuan in accordance with the five-grade classification standard, and the non-performing loan rate dropped by 4.92 percentage points to 26.1 percent. In 2002 the ratio of the loans to domestic non-financial enterprises, treasury bonds, enterprise liabilities and stock financing was 79.4:15.3:1.3:4. Compared with 2001, the ratio of loans and enterprise liabilities rose by 3.5 percentage points and 0,4 percent point respectively, while that of treasury bonds and stock financing dropped by 0.4 percentage point and 3.5 percentage points respectively.
   
       The report states that the current low-level operation of China' s commodity price, for special reasons, has little impact on the global price. In 2002 the volume of global import and export trade stood at around US$6,000 billion. China's export volume totaled US$325.8 billion, accounting for only 5 percent of the global total. The rate dropped to 2 percent when the volume of processing trade was deducted. The low rate will not exert any decisive influence on the global price level.
   
       The report says the current RMB exchange rate and the exchange rate formation mechanism tally with China's national conditions. The overall situation of China's international balance of payments has remained good and the country's foreign exchange reserves have increased considerably, which has laid a solid foundation for maintaining the stability of the RMB exchange rate.