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U.S. Will Push China to Let Yuan Strengthen at Faster Pace

U.S. Will Push China to Let Yuan Strengthen at Faster Pace
A clerk collects Chinese yuan bank notes in Beijing. Photographer: Nelson Ching/Bloomberg

May 5 (Bloomberg) -- U.S. officials will press their Chinese counterparts at a meeting next week to let the yuan strengthen more rapidly, a Treasury Department official said.

“We are going to press China to let its exchange rate adjust at a faster pace to correct its still-substantial undervaluation,” David Loevinger, the Treasury’s senior coordinator for China, told reporters in Washington today. “China continues to intervene massively in foreign-exchange markets to constrain the appreciation of its currency.”

U.S. Treasury Secretary Timothy F. Geithner and Secretary of State Hillary Clinton will meet with Chinese officials including Vice Premier Wang Qishan and State Councilor Dai Bingguo on May 9 and 10 in Washington. Federal Reserve Chairman Ben S. Bernanke and China Central Bank Governor Zhou Xiaochuan will also participate, Loevinger said.

Geithner has reiterated this week ahead of the meetings the Obama administration’s position that China should let the yuan strengthen. The Obama administration and U.S. lawmakers say China’s currency policy gives the nation’s exporters an unfair competitive advantage.

The yuan has gained more than 5 percent against the dollar since June and at an annual rate of about 10 percent when China’s inflation is taken into account.

The currency was little changed at 6.4937 per dollar as of the close at 4:30 p.m. on May 5 in Shanghai, according to the China Foreign Exchange Trade System. The currency touched 6.4892 on April 29, the strongest level since the country unified official and market exchange rates at the end of 1993.

Kurt Campbell, assistant secretary of state for East Asia, said the U.S. will also discuss events in the Middle East with Chinese officials. A Chinese Foreign Ministry statement supporting the killing of Osama Bin Laden was “very much appreciated” by the U.S., he said.

To contact the reporters on this story: Flavia Krause-Jackson at fjackson@bloomberg.net; Ian Katz in Washington at ikatz2@bloomberg.net;

To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net

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