U.S. Treasury Secretary Timothy F. Geithner said the Obama administration will continue to press China to allow the yuan to rise so that companies around the world can compete fairly.
“We think they should move faster,” Geithner said in a radio interview with National Public Radio’s “All Things Considered” program broadcast today. He said a stronger yuan is in China’s interest and would also help the global economy.
A stronger yuan “makes it easier for them to manage their inflation pressures,” Geithner said. “For any country that trades with China, it removes an unfair competitive advantage.”
Geithner meets today with Chinese Vice Premier Wang Qishan at the start of a state visit to Washington by Chinese leader Hu Jintao that will focus on the economic relationship between the two nations. U.S. officials have emphasized the importance of growth in both countries while also pressing for a stronger yuan and tougher intellectual-property protection.
The Treasury chief said there’s “no reasonable prospect” that the yuan might replace the dollar as the main global reserve currency. He also said Chinese officials should bear in mind that the yuan is a “big issue” in the U.S., and he predicted that officials will allow the currency to strengthen.
“I think they will because fundamentally it’s in their interest to do so,” Geithner said.
The yuan rose to a 17-year high against the U.S. currency before Hu’s meeting with Obama, climbing to 6.5824 per dollar. That is the strongest level since China unified official and market exchange rates at the end of 1993.
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