Geithner eyes improved odds on China yuan rise
An employee counts yuan banknotes at a commercial bank in Suining, Sichuan province March 30, 2010.
Credit: Reuters/Stringer
WASHINGTON |
WASHINGTON (Reuters) - Treasury Secretary Timothy Geithner said on Friday the Obama administration wants to "maximize the chances" that China will quickly lift the value of its yuan currency and expressed confidence Beijing would decide doing so was in its interest.
His comments, which come as the Treasury Department prepares a hotly anticipated report that could brand China a currency manipulator, suggested the Obama administration was wary of applying too much pressure on China.
"It's very important that China move," Geithner told Bloomberg Television. "I'm quite confident that they will decide it's in their interest to move. We're going to try to make sure we're going to maximize the chance that they move quickly."
Geithner said the United States would use the Group of 20 wealthy and large developing economies in June as a key forum for discussing broader U.S.-China economic interests with a strategy "designed to increase the odds that China does decide to do what's in their interest, which is to let their currency start to move up again."
The currency issue is expected to be on the agenda at a G20 summit in Toronto.
Officials in Beijing have pushed back against U.S. criticism of their currency policy, which critics say keeps the yuan's value artificially low to give Chinese exporters a global pricing advantage.
Beijing has kept the yuan steady since July 2008, when the global financial crisis significantly worsened, after allowing it to gradually rise for the previous three years.
NO FORMAL DECISIONS
Chinese President Hu Jintao's decision to attend a nuclear security summit hosted in Washington by President Barack Obama on April 12-13 -- just days before the report's April 15 due date -- has fueled speculation that Treasury may decide not to label China a currency manipulator or to delay the report to avoid embarrassment for Hu.
If the Obama administration were to brand China a manipulator, it would set in motion a series of negotiations that could end with the United States slapping unilateral sanctions on Chinese products.
White House spokesman Robert Gibbs, responding to a New York Times report that the currency report would be delayed, said on Friday that no formal decisions have been made.
The newspaper, citing an unnamed administration official, said the decision to postpone the report reflected a judgment that threatening China was not the most effective way to persuade Beijing to let the yuan rise against the U.S. dollar.
Gibbs said Hu's presence at the summit, which the White House has welcomed, had no bearing on the currency decision.
"We are obviously quite pleased that ... he is attending something that the president believes is so vitally important to our national security and to international security," he said.
A Treasury spokeswoman declined to comment on a Wall Street Journal report that the timing of the report could be announced in coming days.
Geithner said he was committed to creating a level playing field for U.S. firms and said that Obama and Congress "care deeply" about the issue.
"What we want to do is make sure that China is growing, they're buying more from America, more of their growth comes from domestic consumption (and) less from exports, and that U.S. firms are able to compete on a level playing field in China," he said. "That's going to guide our interest in China, as China understands and as China expects."
Hu's attendance at the nuclear summit and word from diplomats that Beijing had agreed to join in talks about a fresh round of sanctions against Iran has indicated an easing of U.S.-China tensions.
The two world powers have experienced a rocky period over the last few months, which were marked by disputes over currency, China's Internet controls, U.S. arms sales to Taiwan and a visit by the Dalai Lama, the exiled Tibetan spiritual leader, to the White House.
Obama and Hu spoke for about an hour late on Thursday.
(Editing by Philip Barbara)
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Everyone knows the Chinese are manipulating their currency for their own benefit, knowing full well that they are creating HUGE global trade imbalances (imabalances which are responsible for the recent recession).
Obama is hoping that China will agree to sanction Iran…….something that China has already proved it won’t do. China is not a force for good in this world. When your closest allies are N. Korea, Iran, Sudan, and Venezuela, it paints a very clear picture as to how irresponsible China is.
Wake up and smell the roses Obama! You are selling out America to increasingly mercantilist Chinese policies.
Where was this when Paulson was kowtowing? Where was this when the legislation push moved the jobs to China?
When China, Inc. was formulated after the Japanese model used in the 80’s?
That didn’t happen 14 months ago, folks.
China has us over a barrel. Obama’s walking a tightrope in trying to deal with the Chinese. Obama didn’t cause that; under the circumstances, the U.S. is now pressuring China as much as it can.
Too bad the blinders were on 30 years ago when this started with Japan. The Chinese are just copying that.
And too bad political hacks opine with no sense of how we got into this mess.
Wake up, is right. Let facts shape opinion, not opinion your ‘facts’.
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