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Will Geithner get what he wants in China?

Wednesday, January 11, 2012 - 01:53

Beijing seen warming to Tim Geithner's call for yuan flexibility and Iran sanctions, but it may take more time to achieve a breakthough.

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A formal but cordial reunion as U.S. Treasury Secretary Timothy Geithner touches down in Beijing. Past visits have achieved little. 2009: The U.S. urges China for a more flexible exchange rate. 2010: Geithner urges Beijing to reduce trade barriers. 2011: World Powers urge China to free up the yuan. But this year, could things be different? China has begun revaluing its currency, albeit slowly. And according to analysts, there could be a further thawing of relations this year. China has welcomed America's move to STOP labeling it a currency manipulator. Yonghao Pu of UBS: (SOUNDBITE) (English) UBS WEALTH MANAGEMENT, CHIEF INVESTMENT STRATEGIST, YONGHAO PU, SAYING: "I'm sure that the Chinese government will treat Geithner's visit seriously, because it's an important channel." FLASH "I'm sure the Chinese government will allow the renminbi to appreciate slowly, even moderately basically to give some support to the U.S. government, because U.S. government is also facing an election this year." China may also support the U.S. in pressuring Iran to end its nuclear program. The U.S. critically needs China on board as the world's number two economy is Iran's top oil customer... Former U.S. trade official Frank Lavin says China could join the US in an embargo. (SOUNDBITE) (English) EXPORT NOW CHAIRMAN, FRANK LAVIN, SAYING: "Right now China has a go slow view, but six months from now Iran does something, and that triggers China to move. So I wouldn't be surprised if that's kind of a dynamic. Don't be disheartened so to speak if Geithner leaves China empty-handed." Sino-U.S. leaders might not achieve a breakthough this week, but given time, the leaders could find common ground on key issues. Tessa Dunlop, for Reuters.

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Will Geithner get what he wants in China?

Wednesday, January 11, 2012 - 01:53