After Geithner Visit, Is China Ready to Let Its Currency Strengthen?
Treasury Secretary Timothy Geithner met a high-ranking Chinese official Thursday in Beijing for talks believed to have focused on China’s currency. No breakthroughs were reported by either side but rumblings out of the session seem to signal China may be ready to let the yuan strengthen.
Any such move would be welcome news inside the Obama administration, which has been critical of China’s policy over the past 21 months of keeping the value of the yuan pegged to the dollar. The approach has meant a cheaper price for Chinese goods.
A stronger yuan would make Chinese goods more expensive in the U.S., while bolstering U.S. exports by bringing down the cost of American goods in China.
Details of the meeting, which took place in the VIP terminal of Beijing’s international airport, have not been released by China or the U.S. In a brief statement, the Treasury Department would only say:
“The two sides exchanged views on U.S.-China economic relations, the global economic situation and issues relating to the upcoming economic track dialogue of the second U.S.-China Strategic and Economic Dialogue, to be held in Beijing in late May.”
Several media reports, though, hint at Chinese action on the yuan within the next week.
“While any announcement could still be delayed, China’s central bank appears to have prevailed with its arguments within the Chinese leadership for a stronger but more flexible currency,” reports The New York Times.
Meanwhile, according to The Washington Post, “Chinese economists and analysts said the government was considering allowing the currency’s value to gradually increase up to 3 percent this year.”