A senior economist at the Chinese Academy of Social Sciences has scoffed at a Japanese media report that the central government will revalue the yuan by 30 per cent in five years. A report by Jiji Press, quoting unnamed sources, said the People's Bank of China was considering boosting the yuan in stages. But Hu Biliang, a senior economist at the academy, the central government think-tank, said yesterday the report was purely speculation and that 'no one knows what will take place in five years' time'. 'There is no logic to this,' Mr Hu said. 'The coming five years will see huge economic changes in China and abroad. I don't think a responsible People's Bank official can say what the exchange rate will be in five years. 'What we can say is that many reforms will occur in five years and the exchange mechanism will be more liberalised and in line with market trends. 'That means the exchange mechanism will be more flexible, but whether the renminbi will be devalued or revalued will depend on market sentiment.' China is under growing pressure from the US, Japan and other governments to revalue its currency, which is pegged at 8.28 yuan to the dollar, in order to reduce China's swelling merchandise trade surplus with the US and many other trading partners. The report said in the face of strong domestic opposition, Chinese authorities are expected to move cautiously on the matter, adding the commerce and other departments are strongly opposed to the plan because the revaluation of the yuan will make Chinese exports more expensive. Though Mr Hu disagreed with the Japanese report, he said the renminbi would be driven by market forces in coming years, more than it is today, be it up or down. 'Five years from now, China will have opened its markets fully according to its World Trade Organisation agreement,' he said. 'To have an inflexible exchange rate would make the cost of doing business much higher and it would be disadvantageous to China.'