Hu tells US: We'll adhere to 'gradual reform' of currency
Source: Xinhua/Shanghai Daily |
May 25, 2010, Tuesday
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Print Edition
Print Edition
CHINA would stick to gradual reform of the yuan, President Hu Jintao told the United States at the start of talks in Beijing yesterday.
Hu, speaking at the opening session of the China-US Strategic and Economic Dialogue, said the two needed to enhance economic policy coordination and work together to promote "full economic recovery."
"China will continue to steadily advance reform of the renminbi exchange rate formation mechanism following the principles of being independent, controllable and gradual," he said.
Hu said his government wanted to expand domestic demand to create more balanced growth.
US Treasury Secretary Timothy Geithner said the Chinese government was moving in the right direction on the yuan, which has been effectively pegged to the greenback since the global financial crisis worsened in mid-2008.
"We welcome the fact that China's leaders have recognized that reform of the exchange rate is an important part of their broader reform agenda," he said.
Trying to press the case that appreciation would be in China's interest, Geithner said that a more market-driven exchange rate would help suppress inflation while also driving private firms to move up the value chain.
Chinese monetary policy was driven more by domestic factors than by external ones, said Zhou Xiaochuan, governor of the People's Bank of China.
"With a population of 1.3 billion in the country, most of major factors that need to be considered are domestic ones, although the economy is export-oriented," Zhou told a news briefing as part of the crucial talks.
International factors influenced decision-making, but the impact was usually smaller, he said.
China and the US signalled that there could be progress on two other trade-related policies that have been additional irritants in their relations.
China said that it was working to resolve the concerns of foreign companies about an "indigenous innovation" program that the US has said was unduly restrictive.
Commerce Minister Chen Deming said he was optimistic that the US would loosen controls over high-tech exports, a move that would go a small way to balancing their trade ties.
Both sides showed their willingness to continue the discussion at another "important meeting" to be held in the US this year, Chen told the briefing.
When China entered the World Trade Organization, all WTO members agreed to accept its market economy status no later than 2010, Chen said.
"More than two-thirds of the countries have accepted China's market economy status," Chen said.
China believed that a country's market economy status should be decided by whether the market determined the distribution of resources, Chen said.
"Market economy can be in various forms instead of a unified one," he said.
The talks also touched on Europe's debt woes, with both sides saying they were cautiously optimistic any fallout would be limited.
"The general view was that the pace of the global economic recovery will be basically maintained," central bank governor Zhou said.
US Secretary of State Hillary Clinton and Geithner are co-chairing the strategic talks, which conclude today, with State Councilor Dai Bingguo and Vice Premier Wang Qishan.
About 50 representatives from more than 40 departments of both countries are participating in the talks, designed to enhance mutual understanding and trust between China and the US.
Hu, speaking at the opening session of the China-US Strategic and Economic Dialogue, said the two needed to enhance economic policy coordination and work together to promote "full economic recovery."
"China will continue to steadily advance reform of the renminbi exchange rate formation mechanism following the principles of being independent, controllable and gradual," he said.
Hu said his government wanted to expand domestic demand to create more balanced growth.
US Treasury Secretary Timothy Geithner said the Chinese government was moving in the right direction on the yuan, which has been effectively pegged to the greenback since the global financial crisis worsened in mid-2008.
"We welcome the fact that China's leaders have recognized that reform of the exchange rate is an important part of their broader reform agenda," he said.
Trying to press the case that appreciation would be in China's interest, Geithner said that a more market-driven exchange rate would help suppress inflation while also driving private firms to move up the value chain.
Chinese monetary policy was driven more by domestic factors than by external ones, said Zhou Xiaochuan, governor of the People's Bank of China.
"With a population of 1.3 billion in the country, most of major factors that need to be considered are domestic ones, although the economy is export-oriented," Zhou told a news briefing as part of the crucial talks.
International factors influenced decision-making, but the impact was usually smaller, he said.
China and the US signalled that there could be progress on two other trade-related policies that have been additional irritants in their relations.
China said that it was working to resolve the concerns of foreign companies about an "indigenous innovation" program that the US has said was unduly restrictive.
Commerce Minister Chen Deming said he was optimistic that the US would loosen controls over high-tech exports, a move that would go a small way to balancing their trade ties.
Both sides showed their willingness to continue the discussion at another "important meeting" to be held in the US this year, Chen told the briefing.
When China entered the World Trade Organization, all WTO members agreed to accept its market economy status no later than 2010, Chen said.
"More than two-thirds of the countries have accepted China's market economy status," Chen said.
China believed that a country's market economy status should be decided by whether the market determined the distribution of resources, Chen said.
"Market economy can be in various forms instead of a unified one," he said.
The talks also touched on Europe's debt woes, with both sides saying they were cautiously optimistic any fallout would be limited.
"The general view was that the pace of the global economic recovery will be basically maintained," central bank governor Zhou said.
US Secretary of State Hillary Clinton and Geithner are co-chairing the strategic talks, which conclude today, with State Councilor Dai Bingguo and Vice Premier Wang Qishan.
About 50 representatives from more than 40 departments of both countries are participating in the talks, designed to enhance mutual understanding and trust between China and the US.
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