“US to be candid on economy during Hu trip” |
| US to be candid on economy during Hu trip Posted: 14 Jan 2011 12:18 PM PST 20:18, Friday 14 January 2011 The United States will talk candidly and openly about its economic concerns with China during President Hu Jintao's state visit next week, Treasury Secretary Timothy Geithner pledged Friday. But Geithner also predicted it was inevitable that the value of the yuan, which has irked the United States, would rise, and stressed that substantial opportunities were opening up for US businesses in China. "You're going to hear us talk very openly and candidly about our concerns and our objectives in the Chinese market," Geithner told reporters. "You're going to hear the Chinese talk about their concerns and their expectations for how to make sure they have continued access to US technology, US markets," Geithner said. The United States has made repeated complaints about the level of the yuan currency, arguing that it has been kept artificially low to boost Chinese exports at the expense of the US economy. Geithner however noted that the yuan had moved up at a rate of just over three percent since the Chinese authorities said they would allow the currency to increase in value in June. "That's an annual rate of about 6 percent, maybe 7 percent, 8 percent," Geithner said, adding the best measure of competitiveness for US goods was the combined effect of the rising currency and accelerating inflation in China. "Chinese inflation is accelerating and it's much more rapid than US inflation, the right measure of the pace of appreciation is now more than 10 percent a year, and that's a very substantial material change." "It's important to recognize, it's going to happen. There's no doubt it's going to happen. The only question for China, whether it happens more through inflation or more through the exchange rate itself." Geitner said that based on the changes in the yuan's value made so far, US businesses were beginning to find substantial new opportunities. "The opportunities American companies enjoy in China are expanding quite substantially," Geithner said. "And the relative competitiveness of American companies, American products, American ideas, American services is already moving in our favor, because the Chinese are allowing their currency to now -- to strengthen." China's central bank pledged earlier this month to increase the flexibility of the yuan exchange rate, ahead of Hu's visit. Hu is due to land on Washington on Tuesday, and will be honored with the full pomp of a state visit on Wednesday at the White House. This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at fivefilters.org/content-only/faq.php |
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