An adjustment of the exchange rate is unnecessary at present, Chinese vice minister of finance Lou Jiwei said yesterday at the '99 china business summit here. China will keep its promise not to devalue its currency, he said while detailing plans to boost China's dwindling exports.

However, Lou said China plans to raise its overall tax refunding rate by 2.56 per cent this year for 20 commodities to prevent further fall in exports.

The new refund hike will strongly boost China's exports and check the slowing export increase, the senior official said.

Referring to devaluation of the Chinese currency, renminbi or yuan, the vice minister said China has to consider the overall debt-paying capabilities of both the government and enterprises before taking such steps.

China's exports has declined by 7.9 per cent to $37.27 billion in the firstquarter of 1999 in the face of lingering effects of the Asian financial turmoil. China managed to maintain a fast economic growth of 8.3 per cent during the first three months of this year, mainly due to increased fixed-asset spending by the government to spur domestic demand and boost economic growth.

If the exchange rate is changed, the cost for repaying debt may change accordingly, Lou was quoted as saying by the official media.

Lou, however, expressed China's opposition to the steep devaluation effected by some countries.

Currency devaluation by as much as 30 per cent by some countries is unacceptable to China, Lou said. Currently, China's major economicpolicy stresses the stimulation of domestic demand, the vice-minister said while noting that the global economy has shown signs of improvement.

But Lou also noted that exchange rate was also gradually changing and has acquired a short-term nature.

At the meeting, Lou said China will increase tax refunding rates for 20 commodities includingmachinery, electrical appliances, electronic products and textiles.

Last year, the ministry of finance and the state administration of taxation had raised the export-tax refund rates for coal, iron and steel, cement, ships and textile products and textile machinery. They had also simplified the application procedure for tax refunds for exporters with satisfactory tax records. Meanwhile, China will adjust its policy on machinery import taxes, a move meant to encourage machinery imports to help upgrade the country's products and manufacturing technology.

Similar steps were initiated in 1998 when the Chinese government exempted tariffs and import value-added tax by either domestic or overseas-funded projects.