Snow says China moving to flexible yuan
(Reuters)
Updated: 2005-10-17 19:49

MAKE NO MISTAKE

Snow called these legislative proposals "ill-conceived" and said he was hopeful of being able to point to progress China was making toward more-open markets.

"But we need to see movement," he added. "Let's make no mistake about it. Congress will demand to see movement."

During his Chinese visit, Snow has sought to broaden the discussion of U.S.-Chinese economic relations beyond currency to include easier access for U.S. firms to Chinese banking, investment and other financial services industries.

Still, nearly every question at the news conference dealt with U.S. efforts to get China to adopt a more flexible currency.

Snow said Washington had no timetable for China to act but said the long-term goal was a freely floating Chinese currency.

"The real objective is to see the Chinese currency eventually be fully flexible, eventually to move like the dollar and the euro and other fully floating currencies," he said.

The treasurer of the Asian Development Bank, Mikio Kashiwagi, said its pioneering launch this month of yuan-denominated "panda bonds" in the domestic market was a step in the reform process.

"The only room for discussion is the pace, how fast it should go. There, you know some people are more patient than others," Kashiwagi told reporters. "I think things are very much on track ... they have their own very responsible chart."

Snow declined to say whether the encouraging signs he had heard from Chinese officials made it less likely that China would be named a currency manipulator in next month's report.

"I don't want to foreshadow what we will conclude," Snow said. "You know what we said last time and we're going to continue to look for signs of real progress."

In May, the Treasury warned that China likely would be named a manipulator if it did not amend its currency regime. Beijing's dropping of its currency peg and modestly revaluation came two months later.

"We will continue to look hard at the situation and try and evaluate whether or not sufficient progress is being made," Snow said.