The yuan fell after Chinese President Hu Jintao (胡錦濤), meeting with US President George W. Bush in Washington, declined to respond to pressure to seek a stronger currency.
"It's not an inspiring outcome," said Shahab Jalinoos, head of Asian currency strategy at ABN Amro in Singapore. "Bush didn't push particularly aggressively on China's exchange rate and Hu didn't give them much in that area either."
Hu said after the meeting in Washington on Thursday that the government "will continue to make adjustments" in its exchange rate regime. Bush said he wanted "more appreciation."
The yuan's gains had been accelerating in the past six weeks on speculation China would use Hu's trip as an opportunity to loosen controls on trading the currency.
Surging exports and investment in manufacturing helped China's economy grow 10.2 percent in the first quarter from a year ago, the fastest of the world's 20 largest economies. US lawmakers argue the yuan is kept artificially weak to give exporters an advantage, contributing to the nation's US$201.6 billion deficit with China last year.
The yuan fell 0.06 percent to 8.017 per US dollar as of 3:30pm in Shanghai. The currency has risen 1.2 percent since it was revalued by 2.1 percent on July 21, halting a decade-old peg to the US dollar.
The biggest intraday rally in the yuan since the peg ended is half the maximum 0.3 percent that the People's Bank of China said it would allow the currency to rise or fall each day. It may rise to 7.8 percent by the end of this year, Jalinoos said.
"We will continue to make adjustments to the renminbi exchange-rate regime," Hu said on Thursday, sitting next to Bush in the Oval Office in Washington. "We do not pursue an excessively high trade surplus" with the US.
Gains in the yuan have stalled since the currency rose on April 10 to 8.0022, the strongest since the revaluation. The currency has weakened 0.13 percent in the 10 days through yesterday.
The US Treasury's Snow pushed Chinese central bank Governor Zhou Xiaochuan (周小川) and National Development and Reform Commission Chairman Ma Kai (馬凱) for greater currency flexibility during meetings on Thursday in Washington, a Treasury official said.
The Chinese officials told Snow their government's five-year economic plan will bring more balanced domestic growth, the Treasury official said. The official, who couldn't be identified under Treasury Department briefing rules, didn't say how either message was received and declined to take questions.
The IMF, WTO and Japanese government joined the US in seeking faster yuan gains. The appreciation should reflect China's economic strength, Japanese Chief Cabinet Secretary Shinzo Abe said yesterday in Tokyo.
"Potentially there would be some disappointment for some people," said Richard Yetsenga, a currency strategist at HSBC Holdings Plc in Hong Kong. The US visit by Hu "hasn't been a watershed in terms of generating anything new."
Meanwhile, a White House official said on Thursday that China's moves toward currency flexibility were "not nearly enough" to satisfy US concerns.
The official added, however, that the Bush administration is hopeful about some progress in the future.
"The Chinese are beginning to use their new system for having a flexible currency," said Dennis Wilder, an Asia specialist with the White House National Security Council. "It's not enough, it's not nearly enough."
His comments came after Bush met with Hu at the White House and pressed him to take steps to reduce China's huge trade surplus with the US.
Hu assured Bush he was working to make the Chinese currency more flexible but gave no specifics.
"We're disappointed with how slowly they've moved to use it. But over time we believe they have the ability to use it more," Wilder said.
‘UNFRIENDLY’: Changing the nationality listing of Taiwanese residents to ‘China’ goes against EU foreign policy as well as democratic and human rights principles, MOFA said Taiwan yesterday called on Denmark to correct its designation of the nationality of Taiwanese residents as “China” or face retaliatory measures. The Danish government in 2024 changed the nationality of Taiwanese citizens on their residence permits from “Taiwan” to “China.” The decision goes against EU foreign policy and contravenes democratic and human rights principles, Ministry of Foreign Affairs (MOFA) spokesman Hsiao Kuang-wei (蕭光偉) said. Denmark should present a solution acceptable to Taiwan as soon as possible and correct the erroneous designation to preserve the longstanding friendship between the two nations, Hsiao said. The issue could damage Denmark’s image and business reputation in Taiwan,
The nation’s fastest supercomputer, Nano 4 (晶創26), is scheduled to be launched in the third quarter, and would be used to train large language models in finance and national defense sectors, the National Center for High-Performance Computing (NCHC) said. The supercomputer, which would operate at about 86.05 petaflops, is being tested at a new cloud computing center in the Southern Taiwan Science Park in Tainan. The exterior of the server cabinet features chip circuitry patterns overlaid with a map of Taiwan, highlighting the nation’s central position in the semiconductor industry. The center also houses Taiwania 2, Taiwania 3, Forerunner 1 and
Taiwan climbed to its highest position in global export rankings in more than three decades last year, buoyed by demand linked to artificial intelligence (AI) that lifted shipments of semiconductors and technology products, Ministry of Finance data released yesterday showed. Taiwan accounted for 2.4 percent of global exports last year, or about US$640 billion, ranking 12th worldwide, the data showed. That was up four places from a year earlier and marked the nation’s best ranking since 1994, the ministry said. Taiwan’s share of global exports rose by 0.5 percentage points from the previous year, the largest increase among major economies, reflecting the nation’s
FIRST TRIAL: Ko’s lawyers sought reduced bail and other concessions, as did other defendants, but the bail judge denied their requests, citing the severity of the sentences Former Taipei mayor Ko Wen-je (柯文哲) was yesterday sentenced to 17 years in prison and had his civil rights suspended for six years over corruption, embezzlement and other charges. Taipei prosecutors in December last year asked the Taipei District Court for a combined 28-year, six-month sentence for the four cases against Ko, who founded the Taiwan People’s Party (TPP). The cases were linked to the Core Pacific City (京華城購物中心) redevelopment project and the mismanagement of political donations. Other defendants convicted on separate charges included Chinese Nationalist Party (KMT) Taipei City Councilor Angela Ying (應曉薇), who was handed a 15-year, six-month sentence; Core Pacific
RSS