US presses China over currency in economy talks
BEIJING – U.S. Treasury Secretary Timothy Geithner urged Beijing to let its tightly controlled currency rise in value amid strains over trade and industrial policy at a high-level economic dialogue Thursday.
Beijing has allowed the yuan to rise gradually but Washington and other trading partners complain it still is undervalued, giving Chinese exporters an unfair advantage and hurting foreign competitors. Some American lawmakers are calling for punitive tariffs on Chinese goods if Beijing fails to act faster.
Washington considers “particularly important” the promise of a stronger yuan in China’s latest five-year economic development plan, Geithner said in prepared remarks for the opening of the two days of talks.
In a speech last month, Geithner complained an undervalued yuan was a source of “unfair competition” and called for a “stronger, more market-determined” exchange rate. He said that would help the global economy.
Chinese officials have said, however, that future gains by the yuan are likely to be limited, setting up a possible clash with Washington. Premier Wen Jiabao said in March the currency might have reached an “equilibrium exchange rate.”
Geithner also said Washington supports China’s efforts to overhaul its financial system to increase support for private enterprise and reduce special treatment for government-owned companies.
In his speech last month, the secretary complained that Beijing’s support for state industry through low-cost access to loans, land and resources “hurts U.S. companies and workers who compete with these firms.”