MNI INTERVIEW 2: Downside Yuan Risks Controllable: Advisor

     BEIJING (MNI) - Downside yuan risks for the coming year are controllable

and concerns that slowing exports could hit the balance of payments were

decreasing, Li Daokui, a member of the economy committee of the Chinese People's

Political Consultative Conference (CPPCC), told MNI Tuesday.

     "Now the risks are declining," he said. "It's because the U.S. government

has said it wants to keep the yuan basically stable. The White House and we are

in line with each other in terms of hoping the yuan exchange rate remains stable

instead of (large) fluctuations."

     Li, a former member of the People's Bank of China Monetary Policy

Committee, told MNI he saw room for the central bank to cut interest rates, but

said there was also a need to build a mechanism to lower long-term loan interest

rates and look to ease the transmission of monetary policy into the real

economy.

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

--MNI Beijing Bureau; +86 (10) 8532-5998; email: iris.ouyang@marketnews.com

[TOPICS: M$A$$$,M$Q$$$,MT$$$$,MX$$$$]