Snow Urges China Action on Yuan
By HANS GREIMEL
Associated Press Writer
TOKYO - U.S. Treasury Secretary John Snow on Tuesday urged China to adopt a more flexible, market-driven currency while applauding the recent upswing in Japan's economy.
Snow wrapped up a visit to Japan Tuesday before heading on to Shanghai. The trip comes amid ballooning American trade deficits and increased trade tensions with the two Asian export powers.
Chinese officials said the currency issue would be discussed during a visit to Beijing this week by Snow and Federal Reserve Chairman Alan Greenspan - but they gave no sign Beijing would move faster in loosening its controls on the yuan.
Foreign Ministry spokesman Kong Quan, speaking in a regular press briefing, urged the U.S. side to "heed fully the Chinese position on exchange-rate reform."
While in Tokyo, Snow applauded China's step to cut the yuan's link to the U.S. dollar but said more action is needed.
"We are anxious to see the Chinese fulfill the commitment they made to allow market forces to play a larger role in setting their currency's value over time," Snow said during a press conference at the U.S. Embassy. "They've gotten on the path that allows them to do so and we'd like to see China continue on that path."
In July, China halted its decade-long practice of pegging the yuan's value to the U.S. dollar, choosing instead to let the yuan trade in a narrow band against a basket of currencies of its major trading partners. At the same time, China raised the value of the yuan by 2.1 percent against the dollar.
But since then, the yuan has gained only about 0.3 percent against the dollar.
American manufacturers contend the yuan is now undervalued by as much as 40 percent, making Chinese goods cheaper in the United States and American products more expensive in China. U.S. manufacturers contend that is a major reason for the huge trade gap between the two nations.
So free trade is fine so long as it advantages us, but for another country to take advantage of its resources, not so good, huh?