US delay China currency report, shirking face-off
The Obama administration postponed a decision Saturday on whether to brand China a currency manipulator, skirting a public confrontation by announcing plans to instead pursue broader discussions about how best to secure a global economic recovery.world Updated: Apr 05, 2010 00:08 IST
The Obama administration postponed a decision Saturday on whether to brand China a currency manipulator, skirting a public confrontation by announcing plans to instead pursue broader discussions about how best to secure a global economic recovery.
With China's leader due in Washington later this month and the heads of both countries trying to smooth over a series of disagreements, Treasury Secretary Timothy Geithner said he would delay a world currencies report to Congress due April 15, in deference to "a series of very important, high-level meetings over the next three months."
Geithner's announcement was met with mixed reaction on Capitol Hill, where pressure has been mounting for a confrontation because of concerns that an undervalued Chinese currency is costing American jobs.
Sen. Charles Schumer, D-N.Y., said he was "disappointed but not surprised" and that he will push for legislation calling for stricter treatment of currency manipulation.
In a prepared statement, Geithner cited upcoming meetings among officials of the G20 economically influential countries, as well as high-level economic talks between the US and China. He said those discussions are the proper place to address whether China should allow the value of its currency to rise on world markets.
China has pegged the value of its renminbi, or yuan, to the dollar at a rate that is considered to be undervalued by as much as 40 per cent. That makes its goods cheaper on world markets, a fact some economists say has stunted job growth in the United States, prevented Chinese consumers from spending more and harmed other emerging economies whose factories compete against goods produced in China.
Geithner said it was "essential" for China to let the value of its currency float more freely on global exchanges, but he said the upcoming meetings among world financial officials "are the best avenue for advancing U.S. interests at this time."
In recent weeks, Chinese officials have reacted sharply to the suggestion that the United States might cite it for currency manipulation, warning that America would lose in a "trade war" and saying that its currency policy is an internal matter.
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First Published: Apr 05, 2010 00:06 IST