Snow to check China's currency moves
Updated: 2005-10-08 08:57
Growing high-level visits between China and the United States underline the importance of the bilateral relations, though officials from Washington often bring with them pressures and directives to the other.
On the eve of a trip to Beijing, U.S. Treasury Secretary John Snow said during a testimony to the Senate Finance Committee at the Capitol that he would ask China for more currency flexibility.
People's Bank of China Governor Zhou Xiaochuan and U.S. Treasury Secretary John Snow shake hands before they hold private talks at International Monetary Fund Headquarters in Washington, Saturday, Sept. 24, 2005.[AP]
“It is time to see greater (yuan) flexibility," Snow said. He and Federal Reserve Chairman Alan Greenspan are scheduled to visit Beijing from October 11-16 for the annual Sino-U.S. Joint Economic Conference and the G20 meeting in Beijing.
The U.S. Treasury has told reporters in Washington Friday that Snow will also go to Shanghai and Chengdu to “find facts” whether China would be listed as a currency manipulator in its November report to the Congress.
U.S. manufacturers and their allies in Congress allege that China undervalues its currency, giving its producers an unfair trade advantage. ''Greater flexibility'' is code for allowing the yuan to appreciate further versus the dollar. Washington assumes that market forces would push the Chinese currency higher due to China's large bilateral surplus with the United States.
In July, in the wake of strong pressure from the United States, China's central bank allowed the yuan to appreciate 2.1%, and dropped its dollar peg and set up a managed float system against a basket of currencies, including the yen, euro and won.
"The commitment has been made, the initial step has been made, but we need to see more flexibility incorporated into the currency reflecting real demand and supply in the market," Snow said.