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Geithner to visit China for talks

business Updated: Oct 24, 2010 11:08 IST
AFP
US Treasury Secretary

US Treasury Secretary Timothy Geithner was scheduled to arrive in China on Sunday for talks with Chinese Vice Premier Wang Qishan that would likely touch on the yuan.

Geithner will meet with Wang in China's eastern coastal city of Qingdao after arriving from the just concluded Group of 20 finance ministers meeting in Gyeongju, South Korea, the Treasury Department said in a statement.

The two would discuss "bilateral economic issues," the statement said.

This would likely include China's currency, the yuan, which Washington believes is being kept grossly undervalued in order to help Chinese exporters.

China counters that irresponsibly loose US monetary policy is driving down the dollar and causing a wave of capital to flood emerging markets in search of higher yields.

In a statement released late Saturday, the US Treasury chief said the G20 meeting agreed to a "gradual appreciation" in the currencies of major trade-surplus nations was required.

"Countries with significantly undervalued exchange rates committed to move towards more market-determined exchange-rate systems that reflect economic fundamentals, as China is now doing," Geithner said in a statement.

But further efforts to stabilise international economic balances were necessary if the recovery from the global financial crisis was going to be successful, he added.

"This requires a shift in growth strategies by countries that have traditionally run large trade and current account surpluses, away from export dependence and toward stronger domestic demand led growth," Geithner said.

"This entails a range of policy changes, as you can see in the very broad range of domestic reforms being undertaken by China."