The US will push China to untie its currency from the dollar as soon as possible, a top US Treasury Department official said on Friday ahead of the Group of Seven (G-7) finance ministers meeting.
"Our discussions with China have been good and candid," said John Taylor, the US Treasury Department's undersecretary for international affairs. "We know they are taking steps toward a more flexible exchange rate."
Taylor, who is standing in for US Treasury Secretary John Snow, was to meet with Chinese economic policymakers on Friday. He said the US would like to see China adopt a flexible rate "as quickly as possible."
People's Bank of China Governor Zhou Xiaochuan (周小川), however, hinted in an address to business and government leaders that China will be asking for more time.
Zhou did not address the issue directly, but said China needed more time to reform its economy -- a position repeated often by Chinese officials in the run-up to the meeting of finance ministers from the leading industrialized nations, where China has guest status.
Chinese leaders say they eventually plan to let the yuan trade freely but argue that for now, keeping the currency stable is the best option for the Chinese economy -- and by extension, the world economy.
"We know that reforming the financial sector takes time," Zhou said on Friday. "We need time to educate a new generation of bankers."
China's pegging of the yuan to the US currency has supercharged its exports as the dollar has declined -- dealing a double blow to Japanese and European companies already facing competition in international markets from now-cheaper US products. Critics contend the yuan is undervalued by as much as 40 percent.
Several attendees are expected to highlight the US' huge deficits, which have been a drag on the dollar. The euro rose from about US$1.20 in September to a high of US$1.3667 at the end of December, and the dollar tumbled from about 111 yen in September to 102 toward the end of the year. The dollar has since recovered a little.
European Central Bank president Jean-Claude Trichet told the conference it was unacceptable for developed countries to run long-term current account deficits.
"The industrialized world as a whole is in deficit, there is a current account deficit, and there is no offsetting of the US current account deficit by the other industrialized countries," Trichet said. "That of course means that we are structurally asking the rest of the world to finance us ... It doesn't seem to me that this is an acceptable and sustainable long-term feature of the present functioning of the global economy."
The US trade and budget deficits and the purchase of large US dollar reserves by Asian countries were combining to cause "global imbalances," said Bank of England Governor Mervyn King.
US Federal Reserve Chairman Alan Greenspan told the conference that a variety of factors from a weaker dollar to tougher budget discipline in Congress may finally start to restrain the explosive growth in the US trade deficit.
A weaker dollar should narrow the deficit by making foreign goods more expensive to US consumers and US exports cheaper for foreigners, Greenspan said.
STATE OF THE NATION: The legislature should invite the president to deliver an address every year, the TPP said, adding that Lai should also have to answer legislators’ questions The Chinese Nationalist Party (KMT) yesterday proposed inviting president-elect William Lai (賴清德) to make a historic first state of the nation address at the legislature following his inauguration on May 20. Lai is expected to face many domestic and international challenges, and should clarify his intended policies with the public’s representatives, KMT caucus secretary-general Hung Meng-kai (洪孟楷) said when making the proposal at a meeting of the legislature’s Procedure Committee. The committee voted to add the item to the agenda for Friday, along with another similar proposal put forward by the Taiwan People’s Party (TPP). The invitation is in line with Article 15-2
PLAN: Nations would receive US$5m a year if they could advance Taiwan’s international participation, diversify supply chains away from China or counter Beijing’s influence The US House of Representatives Select Committee on Strategic Competition Between the US and the Chinese Communist Party (CCP) on Friday introduced a bill that would approve US$120 million to be spent on supporting Taiwan’s international space and tackling coercion by China. The bipartisan legislation — the Taiwan Allies Fund Act — was proposed ahead of the inauguration of president-elect William Lai (賴清德) of the Democratic Progressive Party (DPP) on May 20. The committee said in a statement that the bill “strengthens Taiwan’s global network of friends by authorizing [US]$120 million over three years for the State Department and USAID [US Agency
‘DIGITAL SOLIDARITY’: Taiwan, the US, Japan, Australia and New Zealand are to install and operate a cable that would connect up to 100,000 people in the Pacific Islands Taiwan, the US, Japan, Australia and New Zealand are working together to install undersea cables as a demonstration of digital solidarity, US Secretary of State Antony Blinken said on Monday. Blinken talked about the cooperation in a speech he delivered at the RSA Conference in San Francisco. He said that the US International Cyberspace and Digital Strategy launched by the US Department of State “treats digital solidarity as our North Star.” “Solidarity informs our approach not only to digital technologies, but to all key foundational technologies,” Blinken said. Under the strategy, the US is to work with international partners “to shape the design, development,
POSSIBLE SOLUTION: The government needs to convey regulations to advertising platforms based overseas and access to the offenders could be restricted, Minister said The government is considering asking TikTok and other large digital advertising platforms to have agents based in Taiwan in accordance with the draft act on the prevention and control of fraud and crime, which is scheduled to be reviewed at an Executive Yuan meeting today, the Ministry of Digital Affairs said yesterday. The draft act is one of the legislative measures being introduced by the government to tackle scams, including the draft technology investigation and security act, and amendments to the Money Laundering Control Act (洗錢防制法) and the Communication Security and Surveillance Act (通訊保障及監察法). They are also to be reviewed