U.S. Treasury's Lew to push currency reform on China visit
WASHINGTON (Reuters) - U.S. Treasury Secretary Jack Lew said on Friday he would press Chinese officials next week to allow markets to play a bigger role in determining the value of China's currency, saying there had been "negative movement" in recent months.
In an interview with Bloomberg Television ahead of his departure for Beijing on Sunday, Lew said China had taken steps to reform its exchange rate policy but needed to do more to allow markets to determine the yuan's value.
"They widened their trading band. But we've seen some very negative movement in the exchange rate in recent months," Lew said in the interview to be broadcast Friday evening.
"One of the issues that I'm going to bring to them is if your policy says that the exchange rate can go up and down, you need to have market signals determining whether it's going up or down."
The yuan has depreciated in recent months. In April, the Obama administration warned China, the world's second largest economy, that the yuan was too weak and expressed doubts over Beijing's commitment to let market forces determine the currency's value.
In a semi-annual report to Congress, the Treasury stopped short of declaring China a currency manipulator, but singled it out among large U.S. trading partners for its exchange rate practices.
A weak yuan makes Chinese exports cheaper for U.S. consumers, hurting U.S. producers. It also makes foreign goods less affordable for Chinese consumers.
Lew also said he planned to encourage China to continue its economic reforms and open its markets.
In an earlier briefing on Lew's trip, Treasury officials said the talks also would focus on the need for China to adopt a domestic consumption-driven economy and protect intellectual property rights.
Lew will hold meetings with Chinese officials on Tuesday.