US chief upbeat on yuan

US Treasury Secretary Timothy Geithner has said he
believes China is now “committed” to allowing the yuan to go up in
value.

Mr Geithner made the comment in a TV interview before he
held talks with China’s Vice-Premier, Wang Qishan.

The US has long said China keeps the value of the yuan
artificially low to make its exports more competitive, something Beijing
denies.

On Saturday, G20 finance ministers said they would
refrain from such tactics.

Mr Geithner met with Mr Wang in the Chinese port of
Qingdao, following the G20 meeting in South Korea.

A US official said the two sides “exchanged views on
US-China economic relations”, but did not reveal any of the details.

Mr Geithner had earlier told Bloomberg Television that
the Chinese “need the flexibility to run their policies in a way that
makes sense for China”.

He added: “And that requires that their exchange
rate move up over time as they’re now doing and we want to see that continue.

“They’ve got a ways to go, but I think they’re
committed to do that.”

Mr Geithner’s visit to China came after a last-minute
invitation from Mr Wang.

On Saturday, the treasury secretary said the G20 meeting
had agreed that a “gradual appreciation” in the currencies of major
trade-surplus nations was required.

Mr Geithner added that if the global recovery from the
economic crisis was going to be successful, there needed to be “more
balance in the pattern of global growth”.

“This requires a shift in growth strategies by
countries that have traditionally run large trade and current account
surpluses, away from export dependence and toward stronger domestic demand led
growth.”

“This entails a range of policy changes, as you can
see in the very broad range of domestic reforms being undertaken by
China.”

Earlier this year, China promised greater
“flexibility” in its currency approach, but since then the yuan has
only risen slightly in value.

Many in the US say the yuan remains undervalued by as
much as 20%.

The G20 finance ministers meeting in the South Korean
city of Gyeongju also agreed to changes at the International Monetary Fund
(IMF), giving major developing countries more of a say.

US President Barack Obama and Chinese President Hu Jintao
are expected to meet at G20 leaders’ summit in the South Korean capital Seoul,
which takes place on November 11-12.

President Obama is scheduled to attend, but President
Hu’s attendance has yet to be officially confirmed.

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