China 'will not bow on currency'

Envoy tells US that outside pressure on Beijing over exchange policy is unacceptable.

    US politicians say China's policy on the yuan is unfair and costing millions of American jobs [Reuters]

    Zhong however said China believed the stability of the yuan was a benefit to the global economy.

    During his visit Zhong held talks with Timothy Geithner, the US treasury secretary, which focused heavily on the currency row.

    'Manipulator'

    Speaking after the meeting Geithner said that he believed China would allow its currency to appreciate over time, but admitted that the US "can't force them to make that change".

    The US Treasury is due to submit a report to congress in mid-April and is under heavy domestic political pressure to label China a "currency manipulator".

    Such a designation could clear the path for punitive measures against Chinese exports, including tariffs on goods entering the US.

    China has warned repeatedly against any such move, saying it would risk a damaging trade war.

    At the same time the Barack Obama, the US president, is hoping to avoid worsening relations with Beijing, which have already been strained by a series of other rows.

    The Obama administration is keen not to alienate China from supporting several key international issues including a toughening of sanctions against Iran, pressure on North Korea to end its nuclear programme, and Chinese support in pulling the global economy out of recession.

    SOURCE: Agencies


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