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China finance talks target energy prices
(AP)
Updated: 2005-10-16 10:29
The talks are part of an effort to redress the record trade gap between the two countries, which surged to US$162 billion in China's favor last year and is forecast to exceed that figure this year.
"If we truly want to deal with these imbalances bilaterally or multilaterally, you need to focus on more than just the currency," said U.S. Treasury Undersecretary for International Affairs Tim Adams.
"What we have tried to do is take a quantum leap in sophistication and scope so that we can with Congress and with others have a much more informed discussion of how we actually get these things done," he said.
Critics of China's currency policy contend the yuan is undervalued by as much as 40 percent, giving Chinese exporters an artificial price advantage, and that this is a major factor behind the trade imbalance.
Chinese officials say they cannot move any faster in currency reforms after having revalued the yuan by 2.1 percent in July, at the same time giving up a decade-old peg to the U.S. dollar and switching to a basket of major currencies that also includes the Japanese yen and euro. The currency has gained only about 0.3 percent in value since then.
"I don't think that will work toward their interest," Li Ruogu, chairman of the Export-Import Bank of China and a former central bank vice governor, said Saturday of the U.S. pressure.
"China acts as a crucial engine for the whole world and to damage the Chinese growth and Chinese economic development will do no good for anyone," Li told Dow Jones Newswires.
In opening the G-20 meeting, Chinese President Hu Jintao decried the widening divide between the industrialized world and the least developed nations, financial crises and "new manifestations of trade barriers and protectionism."
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