US companies lobby over Chinese currency policies

Manufacturing executives are lobbying US Treasury Secretary Henry Paulson to pressure China into allowing a greater strengthening of its currency.

The National Association of Manufacturers' China Business Task Force will meet with Paulson, Commerce Secretary Carlos Gutierrez and US Trade Representative Susan Schwab on Monday before the officials visit China the following week.

A group of Chinese officials will also come to Washington this week to help prepare for Paulson's trip.

"Their major goal is currency," JP Fielder, a spokesman for the association in Washington, said on Friday.

"They will also talk about intellectual property rights, subsidies and the trade deficit," he said.

The meeting with Paulson will be at the Treasury Department, he added.

Paulson, Schwab, Gutierrez and other officials are seeking to ease tensions between the two nations over currency policies and a US trade deficit that's approaching an all-time high.

Some companies, unions and legislators say that Beijing is keeping the yuan artificially low, giving its exporters an unfair advantage.

China pegged the yuan to the US dollar until July of last year, when it was revalued and linked instead to a basket of currencies.

The yuan has advanced 5.5 percent since China ended the peg, closing at 7.8360 in Shanghai on Friday.

The government limits the yuan from rising or falling more than 0.3 percent a day.

"We want to build a strategy that will allow the yuan to appreciate at a greater rate than it is now," Fielder said.

The US trade shortfall with China reached a record US$23 billion in September, from US$22 billion in August, the Commerce Department said on Nov. 9.

Paulson's trip to China on Dec. 14-15 is marks the beginning of the new China-US Economic Dialogue. Paulson and Wu Yi (吳儀), China's vice premier, agreed in September to meet twice a year for talks on economic relations.

Paulson said at the time he hoped the US could use the new forum to convince China to allow its currency to appreciate and open its capital markets.

In the last two years, as many as 27 trade bills directed at China have been introduced in the US Congress, according to Stephen Roach, chief global economist at Morgan Stanley in New York.