US Treasury chief Henry Paulson voiced his opposition to a bill that would enable Washington to punish China for its weak currency, ahead of a meeting yesterday with Chinese President Hu Jintao (胡錦濤).
"I will not say anything other than the Treasury's view that legislation is not the proper way to proceed and deal with the currency issue," Paulson told China's official Xinhua news agency in an interview. "I believe it is much more productive to have bilateral talks and engagement."
Paulson was referring to a bill passed by the Senate Financial Committee last week that would allow the US government to push other countries to adopt more market-based currency policies or face sanctions.
Paulson, on the final day of a visit to China to discuss a high-level biannual Sino-US Strategic Economic Dialogue, met Hu yesterday afternoon.
Earlier yesterday, Paulson met Shang Fulin (
The Strategic Economic Dialogue covers a range of economic and environmental areas but the issue at the forefront is the yuan, seen by US lawmakers as grossly undervalued to give China an unfair trade advantage.
With Paulson wrapping up his visit, the US Senate Banking Committee is also due to consider another bill that would make it harder for Treasury to avoid a finding that China and other countries have "misaligned currencies."
Paulson has joined Commerce Secretary Carlos Gutierrez and US Trade Representative Susan Schwab in sending a letter to Senate Majority Leader Harry Reid to oppose both pieces of legislation.
The letter, dated July 30, said that since the Strategic Economic Dialogue with China began last year, the yuan's rate of appreciation has tripled and argued that either of the bills now being considered would undo this progress.
"These bills will not accomplish our shared goal of persuading China to implement economic reforms and move more quickly to a market-determined exchange rate," they wrote.