US delays China currency report

The US Treasury Saturday delayed a currency report, due later this month, that could accuse China of currency manipulation.

US delays China currency report

The US Treasury Saturday delayed a currency report, due later this month, that could accuse China of currency manipulation.

The decision follows Thursday's announcement in Beijing that Chinese President Hu Jintao will attend a nuclear security summit meeting in Washington April 12-13.

Treasury Secretary Timothy Geithner announced the delay in a statement, saying there were better venues to advance US interests.

"There are a series of very important high-level meetings over the next three months that will be critical to bringing about policies that will help create a stronger, more sustainable, and more balanced global economy," he said.

Geithner did not give a date for the release of the report, originally due April 15.

The United States has long-accused Beijing of manipulating the yuan's rate against the dollar, to boost Chinese exports.

Delaying the report -- something that happened regularly in prior administrations -- pushes the decision after Hu's visit and avoids the risk of provoking a retaliatory response from Beijing.

Geithner and Secretary of State Hillary Clinton are due to travel to Beijing in late May for a set of talks called the Strategic and Economic Dialogue, and there are meetings of G20 finance ministers in Washington later this month as well as a summit of G20 political leaders in Canada in June.

That gives administration officials a chance to build momentum to encourage Beijing to let its currency find a value that more fairly reflects China's position as the third largest economy in the world.

Washington has recently ramped up pressure on China to let the yuan -- effectively pegged at about 6.8 to the US dollar since mid-2008 -- appreciate.

Some experts believe the Chinese currency is undervalued against the dollar by up to 40 percent. The United States and China's other trading partners claim that it gives the Asian giant an unfair trade advantage by making Chinese exports cheaper.

Reactions

Early reaction from lawmakers, who have focused in recent weeks on China's currency policy as a primary contributor to huge U.S. trade deficits, was negative.

Republican Senator Charles Grassley, ranking minority member on the Senate Finance Committee, said Treasury's move effectively belittles U.S. influence because China's policy of pegging its yuan, or renminbi, to the dollar was blatantly manipulative and said Beijing should be called on it.

"If we want the Chinese to take us seriously, we need to be willing to say so in public," Grassley said in a statement.

Finance Committee Chairman Max Baucus said Geithner should take a hard look at whether China is a currency manipulator and work with it and other trade partners to address Beijing's currency practices.

"For years, Treasury has given China's currency practices a free pass, but it's time to re-evaluate," Baucus said. "For too long, the United States has pursued diplomacy at the expense of American jobs and exports. Further delay is not the answer."

A declaration that China manipulated its currency would trigger negotiations between Washington and Beijing and potentially lead to sanctions if China refused to yield by moving toward a more flexible currency rate.

Agencies

Güncelleme Tarihi: 04 Nisan 2010, 17:27

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