Barack Obama

China comments not a "determination": White House

WASHINGTON (Reuters) - The White House on Monday hedged U.S. Treasury Secretary-designate Timothy Geithner’s statement that China was manipulating its currency, saying a formal decision on the issue would be made in coming months.

“Mr. Geithner was restating what the president had said during the campaign, not making any determinations,” White House spokesman Robert Gibbs told reporters.

“We have to take a comprehensive approach to enhancing our economic relationship with China, including the currency issue,” Gibbs said.

Geithner -- who is expected to win Senate confirmation on Monday -- told the Senate Finance Committee in written responses to questions last week that President Barack Obama “believes that China is manipulating its currency,” the yuan.

That broke a long-standing taboo of the Bush administration and increased expectations that the United States would formally cite China for currency manipulation in a semi-annual report due out in April.

Beijing has bristled at the suggestion it is manipulating its currency for a trade advantage and raised concern it could become a pretext for U.S. efforts to keep out its goods.

“These comments do not only not accord with reality, they are also a misinterpretation of the main reasons for the financial crisis, and will encourage the rise of trade protectionism in some Western countries,” China’s official Xinhua news agency said in commentary on Sunday, without directly naming the United States.

Gibbs indicated it was still an open question whether the Obama administration would cite China.

“Every administration since 1989 has had to make a determination about currency each spring ... I think it’s safe to say that this administration, like the others, will determine in the spring what that means,” Gibbs said.

Geithner’s predecessor in the Bush administration, Henry Paulson, was the U.S. chair of a high-level forum with China known as the “strategic economic dialogue.”

In his written responses to the Senate Finance Committee, Geithner said he expected high-level economic talks to continue between the United States and China, but “exactly what form that will take is something that we are considering.”

The U.S. Senate is expected to approve Geithner, the 47-year-old New York Federal Reserve Bank chief, to become the U.S. Treasury secretary, despite misgivings about his past tax errors.

Reporting by David Alexander, Caren Bohan and Doug Palmer; Editing by James Dalgleish