Yuan to face gradual reform
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A Chinese official has said China would reform its currency policy gradually and keep the exchange rate stable, rejecting mounting United States calls to allow the yuan to rise more quickly.
Chinese Vice Commerce Minister Zhong Shan, in Washington amid US-China trade and political tensions, said on Wednesday that changing the exchange rate was not the way to fix a huge bilateral trade gap and could upset the world economy.
"Revaluing the yuan is not a good recipe for solving problems," he told the US Chamber of Commerce, according to a transcript obtained by Reuters.
"It is in nobody's interest, China's, the US' or other countries', to see big ups in the yuan or big downs in the dollar," Zhong said.
Zhong warned US business leaders that a stronger yuan might not be a solution to American economic problems.
"A dip in the value of dollar will undoubtedly bring great repercussions to the global financial system and the world economy," he said.
"The right way to reach trade balance between China and the US should be expanding exports from the US to China, rather than limiting China's exports to the US," Zhong added.
US Treasury Secretary Timothy Geithner said it was critical for China to allow its currency to rise. "We can't force them to make that change," he said in an interview with CNN.
"But it is very important that they let it start to appreciate again. And I think many of them understand that," he said, according to an advance transcript provided by CNN.
With the US economy having shed 8.4 million jobs since December 2007, lawmakers have focused on China's currency. Senators are crafting a law that would slap import duties on Chinese goods to offset the low value of its currency.
Sponsors of the bill, Democratic Senator Charles Schumer and Republican Senator Lindsey Graham, also want the Obama administration to formally label China a currency manipulator in a semi-annual Treasury Department report due on April 15.
The administration twice rejected that route in 2009, as did the Bush administration.
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