China should not allow the Renminbi to appreciate, and if it does it will be a severe setback for the economy, said Robert Mundell, a Nobel Economics Prize winner. "China should stick to its current monetary policy," Mundell made the remarks at the 2005 China Economic Summit, which opened on May 25. Instead, China could consider relaxing its foreign exchange control, he said. Mundell cited the remarks by Greenspan, chairman of the US Federal Reserve. Greenspan said last week that the reevaluation of Chinese currency will not improve the US trade deficit. Mundell also said it did not go along with the usual practice of International Monetary Fund to pressure the yuan appreciation, as yuan is currently not convertible. "Never before, in the whole history of IMF, that a country within convertible currency, appreciated its currency," he said. In a report on monetary policy implementation in the first quarter of the year, the central bank suggested related government departments follow closely the changes in the property market and coordinate monetary, land, taxation and supervision policies to promote the healthy development of the real estate market. The report acknowledged that nationwide, a host of macro-regulation policies including a mid-March decision to raise the interest rate of housing loans, had been felt in the market. The outstanding amount of commercial real estate loans stood at 2.5 trillion yuan (301.9 billion US dollars) by the end of March, up 25.1 percent on a yearly basis, and the growth rate plummeted by 17.1 percent from a year ago. The total investment in the property market reached 232.4 billion yuan (28.1 billion dollars) in the first quarter of the year, representing an annual rise of 26.7 percent. The growth rate also fell 14.4 percent from the same period last year, the report said. About the People's Bank of China The People's Bank of China (PBC) was established on December 1, 1948 based on the consolidation of the Huabei Bank, the Beihai Bank and the Xibei Farmer Bank. In September 1983, the State Council decided to have the PBC function as a central bank. The Law of the People's Republic of China on the People's Bank of China adopted on March 18, 1995 by the 3rd Plenum of the 8th National People's Congress has since legally confirmed the PBC's central bank status. With the improvement of the socialist market economic system, the PBC, as a central bank, will play an even more important role in China's macroeconomic management. The amended Law of the People's Republic of China on the People's Bank of China, adopted by the 6th meeting of the Standing Committee of the 10th National People's Congress on December 27, 2003, provides that the PBC performs the following major functions. Read also: Chinese government to regulate property prices Construction industry's production in China in the first half of 2004 China to provide new rules for real estate trust products Chinese real estate design ambition China to increase nuke construction China’s real estate attracts foreign investment Selling prices of housing kept on rising in China China’s real estate prices steadily increase