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U.S. presses China over currency during economic talks
BEIJING (AP) — U.S. Treasury Secretary Timothy F. Geithner urged Beijing to let its tightly controlled currency strengthen and open its markets wider amid trade strains at a high-level economic dialogue Thursday.
Chinese officials denied the yuan is undervalued and pressed Washington to ease controls on exports of high-tech goods.
Beijing has allowed the yuan to rise gradually, but Washington and other trading partners complain it still is too weak, giving Chinese exporters an unfair advantage and hurting foreign competitors. Some American lawmakers are calling for punitive tariffs on Chinese goods if Beijing fails to act faster.
This week’s talks, overshadowed by a diplomatic tussle over a blind Chinese legal activist, come as a weak global economy and pressure on governments of developed countries to generate jobs are fueling trade complaints against China.
In more pointed language last week, Mr. Geithner complained that an undervalued yuan was a source of “unfair competition.” He called for a “stronger, more market-determined” exchange rate and said that would help the global economy.
Trade Minister Chen Deming denied the yuan was undervalued and pointed to China‘s shrinking global trade surplus. China reported a $5.3 billion surplus in March, down from a monthly level of at least $15 billion for most of 2011.
The annual talks are aimed at heading off trade clashes between the world’s two biggest economies and promoting cooperation on a wide array of environmental, financial and other issues. This year’s round includes U.S. Federal Reserve Chairman Ben S. Bernanke; his Chinese counterpart, Zhou Xiaochuan; and top trade, energy and finance officials from both sides.
The Chinese envoy, Vice Premier Wang Qishan, stressed the importance of cooperation to support global growth.
“The global economic recovery remains sluggish, and the situation is grim and complicated,” Mr. Wang said.
Washington welcomed Beijing’s move in April to widen the daily trading band within which the yuan is allowed to fluctuate from 0.5 percent to 1 percent but thinks it failed to go far enough to create a market-driven exchange rate, according to a senior administration official with Mr. Geithner’s delegation.
U.S. officials pressed China to lower import barriers and create a more “level playing field” for foreign companies, said the official, who briefed reporters about the talks on condition of anonymity.
The United States reported its trade deficit with China reached an all-time high of $295.5 billion last year, up 8.2 percent from 2010’s previous record.
The U.S. Commerce Department announced last month it would impose new import fees on Chinese-made solar panels after concluding manufacturers received improper subsidies. Chinese authorities announced their own probe in November into whether U.S. support for renewable energy companies hurts foreign suppliers.
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