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Snow: China can move faster on currency
(Reuters)
Updated: 2005-11-05 08:51
US Treasury Secretary John Snow on Friday said China was in a position where
it could move more swiftly toward greater currency flexibility.
"I think that China remains committed to greater flexibility in their
currency and opening of their financial markets," Snow said in an interview with
CNBC. "It's an irreversible course and we think they're now in a position to
move even faster."
"We're urging them to move faster" toward greater currency flexibility, Snow
added. "I think they know it's in their own interest to continue on this path
and even accelerate it."
U.S. manufacturers and many lawmakers have long complained an undervalued
yuan currency was giving China an unfair trade advantage in global markets.
In July, China dropped a long-standing policy of pegging the yuan to the
dollar, revalued it by 2.1 percent, and adopted a managed float with reference
to a basket of currencies. Since that move, however, the yuan has appreciated
only a further 0.3 percent, disappointing U.S. lawmakers.
In an interview with Bloomberg Television, Snow said there was a good deal of
momentum on legislation in Congress that would slap hefty tariffs on Chinese
exports to the United States, but that was not the right approach.
"There is strong feeling running in the Congress that China needs to move on
the trade issues, on intellectual property rights, on counterfeiting, and on the
currency, and that legislation certainly has some momentum to it," he said.
But he added: "I don't think it's particularly good legislation, I think it
points the wrong way."
Snow and Federal Reserve Chairman Alan Greenspan on Wednesday met with the
two lawmakers who have sponsored the legislation -- Democratic Sen. Charles
Schumer of New York and Republican Sen. Lindsey Graham of South Carolina.
Schumer and Graham unexpectedly won a procedural vote on the bill early this
year by a tally of 67-33, but they agreed to pull it from consideration after a
late-June meeting with Snow and Greenspan convinced them China was about to act.
It is not clear if the latest meeting would similarly lead them to hold off
pressing for a vote. "We'll see," Schumer told Reuters on Thursday. "We'll see
if there's progress."
President George W. Bush is scheduled to travel to China in the middle of the
month.
In the CNBC interview, Snow reiterated the U.S. policy line on currencies,
saying foreign-exchange rates are best set in open, competitive financial
markets.
Asked about a report released earlier on Friday that showed U.S. employers
added only 56,000 workers to their payrolls last month, Snow told CNBC it was
"pretty good" in light of high energy prices and the damage wrought by recent
hurricanes.
"I think this is pretty good performance under the circumstances and I think
... it shows the American economy is capable of taking a blow and bouncing back
and that the fundamentals are strong."
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