Briton takes fall after yuan drops

• Tania Branigan in Beijing
• guardian.co.uk, Monday 23 February 2009 18.35 GMT
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A well-known British business consultant in Beijing resigned today after publishing comments that apparently sparked a fall in the renminbi.

The Chinese currency dropped sharply last week after China Briefing quoted senior officials in Beijing saying it could weaken to around 6.9 to 7.0 yuan against the US dollar. But their agencies swiftly insisted that they had not granted interviews to the magazine.

Chris Devonshire-Ellis, publisher of China Briefing and senior partner of professional services firm Dezan Shira and Associates, said he had quit over the row.

"Due to the serious error of judgment I made publishing details of off-the-record meetings with Chinese ministers, I have decided to step down from these roles," he said in a statement published on China Briefing. "I have enjoyed working with our staff and clients in helping them prosper and succeed in China and I want to thank all those who have helped me over the past 17 years."

He founded DSA, which publishes China Briefing, 17 years ago.

The exchange rate has long been a thorny issue in discussions between China and the west, but it is particularly sensitive now because of the economic downturn and the plummeting demand for exports. The renminbi has appreciated substantially against the dollar over the last year, making it harder for Chinese manufacturers to sell their goods, but many in the US believe it is still too low and want to see it rise further. The spot yuan price has traded in a range of about 6.81-6.88 to the dollar since July.

Traders began buying the dollar against the yuan on Tuesday after China Briefing quoted Zhang Xiaoqiang, vice-chairman of the National Development and Reform Commission, saying the dollar could strengthen to between 6.95 and 7.00 yuan in the short term.

Though the NDRC does not manage currency exchange, it is the country's main economic planner, lending substantial weight to any comments from its officials. But it insisted that Zhang had "never accepted interviews with any media and has never made such comments".

The following day China Briefing attributed the prediction to Liu Mingkang, chairman of the China Banking Regulatory Commission, only for the commission to issue a statement insisting none of its officials had been interviewed by the author and that "this news is a pure fabrication".

The website then backed away from attrib­uting specific currency levels to an individual official, citing "an error in transcript and translation".

Deng Xianhong, deputy head of the State Administration of Foreign Exchange, said later that China would keep the exchange rate of the yuan stable and prevent large fluctuations.