U.S., China Pledge to Address Currency, Financial Issues

News

U.S., China Pledge to Address Currency, Financial Issues

Bloomberg Businessweek – U.S. Treasury Secretary Timothy F. Geithner and Chinese Vice Premier Wang Qishan pledged today to tackle currency, financial services and trade conflicts between the world’s two biggest economies.

At the start of the two-day Strategic and Economic Dialogue, Geithner said China has been making progress “towards a more flexible exchange rate” and weaning its economy off a dependence on exports. He also called for China to overhaul its financial system and said the U.S. will work to improve its fiscal outlook.

Chinese Commerce Minister Chen Deming told reporters the yuan exchange rate will be discussed with U.S. officials this afternoon.

Top-ranking officials from the two nations meet in Washington amid U.S. pressure for China to allow the yuan to rise against the dollar and to tackle inflation by raising interest rates. Chinese leaders, in turn, have expressed concern about U.S. budget deficits and spillover effects from the Federal Reserve’s purchases of Treasury securities to stimulate the economy.

Senator Sherrod Brown, a Democrat from Ohio, urged the administration to press China on the currency issue and also said Congress should pass legislation to protect American workers from an undervalued yuan. Brown and Senator Olympia Snowe, a Republican from Maine, have proposed a measure to allow additional sanctions to address currency issues.

Read the whole article »