Xinhua quoted an adviser to China central bank said China reform of the renminbi also known as the yuan has been successful and the yuan exchange rate is approaching an equilibrium level.

Mr Li Daokui a member of the monetary policy committee of the People's Bank of China said "During the last few months of 2011, many Chinese private investors started to spend the Chinese currency buying U.S. dollars which is an indication that the currency is near an equilibrium level."

According to the PBOC Thanks to a stronger yuan, China trade surplus has shrunk from about 8 percent of the country's gross domestic product before the financial crisis in 2008 to 2.3% registered in 2011.

Mr Li speaking on the sidelines of the Annual Meeting of World Economic Forum in Davos expected the trade surplus to further decline in 2012, to 1% and mainly thanks to the stronger Chinese currency, which means the reform of the yuan exchange rate mechanism has been successful.

According to the PBOC since the Chinese government embarked on the reform of its currency exchange rate mechanism in June 2010, the RMB has appreciated by more than 7.5% against the US dollar.

According to a report submitted by the US Department of Treasury to the Congress on international economic and exchange rate policies in December taking into account the higher rate of domestic inflation in China than in the United States, the yuan has appreciated even more against the US dollar.

(Sourced from Xinhua)