Sat, Dec 16, 2006 page10

• China promises yuan flexibility

  DIFFERENT STROKES Chinese Vice Premier Wu Yi said the talks with the US were useful and productive, but acknowledged that a number of differences remained

  • AP
  • • 
    • 
    • 

  US Treasury Secretary Henry Paulson said yesterday that China had pledged greater exchange rate flexibility but gave no timetable as the two sides wrapped up high-level talks aimed at strengthening shaky relations.

  The US and Chinese delegations announced agreements to cooperate more closely to promote trade, open markets, protect the environment and develop cleaner energy sources.

  But they gave no indication of commitments that might mollify US critics who wanted Paulson to take a hard line with Beijing on its currency, which they say is unfairly undervalued and puts US companies at a disadvantage.

  "We each will take measures to address global imbalances through greater national savings in the United States and to increase consumption and exchange rate flexibility in China," Paulson said.

  Paulson was speaking at briefing with his counterpart, Chinese Vice Premier Wu Yi (吳儀), who described the two-day discussions as useful and productive but did not comment on the currency dispute.

  "This dialogue has helped both of us to build mutual understanding and enhance trust," she said, adding that a number of differences remained.

  "That such differences remain is understandable because the actual situations of China and the United States are completely different," Wu said.

  The talks at the Great Hall of the People in central Beijing were billed as a long-range "strategic economic dialogue."

  They were launched by US President George W. Bush and Chinese President Hu Jintao (胡錦濤) in September as a way for the countries to boost their economic ties.

  The second round will be held in Washington in May.

  Wu said Beijing hoped the exchanges would help clear up US misunderstandings about China.

  China's mounting trade surpluses with the US have fueled complaints by US manufacturers that Beijing keeps the Chinese yuan undervalued, giving its exporters an unfair price advantage.

  In a speech yesterday in Beijing, US Federal Reserve Chairman Ben Bernanke said a more flexible currency would improve the lives of China's people and foster global economic stability.

  Bernanke, who was part of Paulson's delegation, said it was in China's best interest to move toward letting the market set the value of the yuan, which would likely see it rise against the dollar.

  The move would "enhance China's future growth and stability," Bernanke said at the Chinese Academy of Social Sciences.

  The US says its trade gap with China last month swelled to US$24.4 billion. It is on track to hit US$229 billion this year, compared with US$202 billion last year.

  The export surge has nudged up the yuan, which on Thursday was allowed to rise to its highest level since Beijing began easing controls in July 2005, partly in response to US prodding. Chinese stock markets also rose to a five-year high on Thursday.

  Paulson has tried to downplay expectations of breakthroughs in this week's talks, describing them as the start of a long-term discussion, but the high-profile of the US delegation had raised expectations.

  Besides Bernanke, Paulson's delegation also included Energy Secretary Samuel Bodman, Commerce Secretary Carlos Gutierrez, US Trade Representative Susan Schwab and Health and Human Services Secretary Mike Leavitt, as well as the head of the Environmental Protection Agency.

  Chinese Finance Minister Jin Renqing (金人慶) told the same briefing that Beijing would allow the NASDAQ market and New York Stock Exchange to open formal business offices in China.

  Jin did not give a timetable for opening the offices or any other details. Dozens of Chinese companies have listed shares on NASDAQ and the New York Stock Exchange, and both are eager for business as China's economy booms.

  also see story:
  

  China and US are not world's only economies
• Most Popular

  • 1

    China to ban sales to US

  • 2

    Earthquakes exceeding magnitude 5.5 on the Richter scale hit 14-year high

  • 3

    Taiwan places military on high alert

  • 4

    China warships near Taiwan nearly doubles

  • 5

    Flights arranged for Taiwanese stranded in Okinawa