China resists US yuan concerns
US: Chinese President Hu Jintao urged an end to a “zero sum”
Cold War relationship with the United States and proposed new
cooperation, but resisted US arguments about why China should let its
currency strengthen.
Indeed, in a sign that the future of the US currency continues to
concern the most senior levels of the Chinese Government, he said the
dollar-based international currency system is a “product of the past”.
Overall though, Hu, who will visit Washington this week, struck an
upbeat tone about ties with the United States in a rare written
interview with two US newspapers, the Wall Street Journal and the
Washington Post.
“We should abandon the zero-sum Cold War mentality,” he declared, and
“respect each other’s choice of development path.”
Hu suggested cooperation with the United States in areas like new
energy sources, clean energy, infrastructure development, aviation and
space.
He also reassured foreign businesses in China that Beijing would
continue to improve laws and regulations affecting them.
And he spoke encouragingly about the outlook for resolving tensions
on the Korean peninsula, an area of concern to both Washington and
Beijing.
But the Chinese president also indicated he does not accept US
arguments for Beijing to let its currency appreciate. Critics say
China’s undervaluing of the yuan gives it an unfair price advantage in
international trade, contributing to the huge US trade deficit.
Analysts thought Hu’s generally conciliatory tone augured well ahead
of his Washington meetings with President Barack Obama and other
officials.
“Hu makes it clear that China intends to move forward on opening its
markets, freeing up its exchange rate and restructuring its political
system, but at its own pace and with little heed to external pressures
for more rapid or broader reforms,” said Eswar Prasad, a Brookings
Institution economist and former International Monetary Fund official.
Washington, Monday, Reuters |