Yuan to rise 5% in 2011: Report

China's yuan will rise some 5% in 2011 against the dollar as Beijing needs a stronger currency to combat inflation and possible asset bubbles, the official China Securities Journal said in a front-page editorial on Wednesday.                                           

The appreciation of the yuan will be particularly strong in the first half of this year, the newspaper said.                                           

"Yuan appreciation will make imports cheaper to reduce the impact of rising commodity prices in the international market,  which will provide relief from China's inflationary pressures," the editorial said. 

Benchmark one-year non-deliverable dollaryuan forwards were bid at 6.4360 on Tuesday, implying the yuan will rise about 3% in a year's time.                                          

But China-based traders expect the yuan to appreciate about 2% in the first quarter of 2011 alone, partly propelled by Chinese President Hu Jintao''s visit to the United States in mid-January. 

While the Chinese government generally tries to paint a picture that it resists US pressure for yuan appreciation, in reality it has often let it strengthen ahead of major political events, as a recognition of the importance of the  diplomatic and economic ties between the world's two biggest economies.