January Reports Highest-Ever Monthly Growth in China's Foreign Exchange Reserves

January Reports Highest-Ever Monthly Growth in China's Foreign Exchange Reserves

April 19, 2007

    SHANGHAI, China, April 19 /Xinhua-PRNewswire/ -- Xinhua
Finance Limited and the Milken Institute today release the
media update on the Renminbi Pressure Indicator.

    (Logo: http://www.xprn.com.cn/xprn/sa/200611140926.gif
)

    Indicator Value Change
    January 2007 196.6
    December 2006: 194.1
    Month-to-month change: 1.33%
    January 2006: 177.8
    Year-to-year change: 10.57%

    Please visit
http://www.xinhuafinance.com/en/charts/ipo_rpi/0704/rpi_chart_en.jpg
to download the chart. 

    Highlights 

    In January 2007, the Renminbi Pressure Indicator (RPI)
increased by 1.33 percent, the largest month-to-month
increase since the initial revaluation in July 2005. 
China's foreign exchange reserves rose to US$1.1 trillion.

    Analysis 

    The gain in the RPI, from 194.1 to 196.6 over the
previous month, was attributable to appreciation of the
yuan and an increase in foreign exchange reserves, which
increased nearly US$38.3 billion from December.  The
reserves increase was the highest month-to-month jump in
absolute dollar amount.  In percentage points, China's
foreign exchange reserves represented the greatest gain
since December 2004.  The rate of yuan appreciation against
the U.S. dollar accelerated to 0.40 percent, from 0.31
percent in December, while growth in China's foreign
exchange reserves accelerated to 3.60 percent, from 2.67
percent.  Of the 1.33 percent growth in RPI, the yuan
appreciation accounted for a 0.13 percentage point
increase, and growth in reserves contributed the remaining
1.20 percentage point increase.  There was no change in
domestic interest rates in January.  (In February and March
2007, the rates of yuan appreciation against the dollar grew
0.47 and 0.07 percent, respectively.  Interest rates
increased by 0.27 percent in March.) 

    Methodology 

    The RPI is based on a monthly examination of the
interaction between the following variables to compute
overall cumulative exchange rate pressure: the percentage
change in the spot exchange rate, the percentage change in
foreign exchange reserves, and the change in domestic
interest rates. 

    The indicator measures the pressure on China's currency
relative to the U.S. dollar.  It is set equal to 100 on
January 1, 2000.  Increases in the RPI reflect appreciation
pressure on the renminbi (RMB). 

    Xinhua Finance/Milken Institute China Indicators 

    The Xinhua Finance/Milken Institute China Indicators
are aimed at providing investors, analysts, and financial
professionals deeper insight into China's money and capital
markets.  Three of the eight indicators¨Dthe Renminbi
Pressure Indicator, the Chinese IPO Indicator, and the
Market Adjusted Debt Indicator¨Dwere launched in November
2006.  Banking Strength Indicator and Adjusted Trade and
Finance Indicator will be launched in April 2007.  The
remaining indicators will be launched in 2007. 

    Time Period Coverage and Frequency

    The indicator covers the period from November 30, 1980,
through January 2007.  Data are available from the Milken
Institute upon request.  There will be a two- to four-month
delay in reporting values for the indicator, depending on
the release of information from authorities in China. 

    Sources of Data 

    The data used in the construction of the indicator are
obtained from the International Monetary Fund, People's
Bank of China, and State Administration of Foreign
Exchange. 

    To view additional information, visit
http://www.xinhuafinance.com/indicators and
http://www.milkeninstitute.org/chinaindicators . 

    Xinhua Finance Limited is China's unchallenged leader
in financial information and media, and is listed on the
Mothers board of the Tokyo Stock Exchange (symbol: 9399)
(OTC ADRs: XHFNY).  Bridging China's financial markets and
the world, Xinhua Finance serves financial institutions,
corporations and re-distributors through four focused and
complementary service lines: Indices, Ratings, Financial
News and Investor Relations.  Founded in November 1999, the
Company is headquartered in Shanghai with 20 news bureaus
and offices in 19 locations across Asia, Australia, North
America and Europe.  For more information, please visit
http://www.xinhuafinance.com . 

    The Milken Institute is a nonprofit, independent
economic think tank whose mission is to improve the lives
and economic conditions of diverse populations around the
world by helping business and public policy leaders
identify and implement innovative ideas for creating
broad-based prosperity.  The Milken Institute has extensive
expertise in China and conducts ongoing research on China's
banking and capital markets.  It is based in Santa Monica,
Calif. For more information, please visit
http://www.milkeninstitute.org .


    For more information, please contact:
 
    Xinhua Finance
    China
     Ms. Joy Tsang
     Tel:   [phone] or [phone]
     Email: [e-mail]
 
     Mr. Scott Zhang
     Tel:   [phone]
     Email: [e-mail]
 
    Japan
     Mr. Jiong Sun
     Tel:   [phone]
     Email: [e-mail]
 
    Taylor Rafferty (Media contact for Xinhua Finance)
    Japan
     Mr. James Hawrylak
     Tel:   [phone]
     Email: [e-mail]
 
    United States
     Mr. John Dudzinsky
     Tel:   [phone]
     Email: [e-mail]
 
    Europe
     Faisal Kanth 
     Tel:   [phone]
     Email: [e-mail]

    Milken Institute
     Ms. Jennifer Manfre
     Associate Director of Communications
     Tel:   [phone]
     Email: [e-mail]