Thursday, April 8, 2010

US Treasury Secretary Geithner to visit China

US Treasury Secretary Timothy Geithner will visit China on Thursday, US officials said, as the two sides try to resolve deep tensions in their relationship, notably over the value of the yuan.

The visit comes just days before Chinese President Hu Jintao will head to Washington for an international summit on nuclear security -- suggesting the two countries are getting their relationship back on track.

Geithner will hold talks with Vice Premier Wang Qishan, who is in charge of economic and financial issues. He also heads the Chinese side for the Strategic and Economic Dialogue with the US, the next round of which takes place in May.

"This is a visit that we just confirmed yesterday," Richard Buangan, a spokesman for the US embassy in the Chinese capital, told AFP on Wednesday.

In New Delhi, where Geithner was wrapping up a visit to India, his spokesman Andrew Williams said the US Treasury secretary and Wang had been "working together to find an opportunity to meet in person for some time".

Geithner was to spend Wednesday night in Hong Kong before heading to Beijing on Thursday, he said.

The US embassy spokesman said the talks would be closed to the media.

Neither US official would comment on the agenda for the talks.

But Washington and China's other key trading partners have been intensifying the pressure on Beijing to allow the yuan to appreciate, saying it gives the Asian nation an unfair trade advantage by making Chinese exports cheaper.

The Chinese currency has been effectively pegged at 6.8 to the US dollar since mid-2008, and US lawmakers have been pushing the US Treasury to label China a "currency manipulator" -- a move that would open the door to sanctions.

Both Democratic and Republican lawmakers accuse China of deliberately undervaluing the yuan, leading to a flood of inexpensive goods and contributing to a trade deficit which soared to nearly 227 billion dollars in 2009.

But the US Treasury at the weekend announced the delay of a report expected in mid-April that could have slapped China with the "manipulator" tag, with Geithner saying there were better ways to advance US interests.

"There are a series of very important high-level meetings over the next three months that will be critical to bringing about policies that will help create a stronger, more sustainable and more balanced global economy," he said.

In India on Tuesday, Geithner said the decision to revalue the yuan "is China's choice, this is their judgement to make".

But he told India's NDTV network he was "confident that China will decide it is in their interest to resume the move to a more flexible exchange rate that they began some years ago and suspended in the midst of the financial crisis".

Chinese foreign ministry spokeswoman Jiang Yu said Tuesday that Beijing would continue to adapt its exchange rate regime in a "proactive and gradual manner" but rejected the idea that it was to blame for any trade imbalance.

"China has never used this so-called currency manipulation in an effort to benefit from international trade -- we hope the US side can view this question in an objective way," she said.

Hu is due in Washington on April 12-13 -- just days before the US Treasury report was to have been issued -- prompting speculation that a deal was reached to ensure a smooth visit.

Hu and US President Barack Obama will meet on the sidelines of the summit, probably on Monday, the White House said.

Those discussions are likely to touch on a host of issues dogging Sino-US ties -- including Taiwan, Tibet, Internet freedom and the yuan.

"The administration will continue to press the Chinese to, as the president has said, value their currency in a way that's much more market-based," said White House spokesman Robert Gibbs.

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