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John Snow, former US Treasury Secretary, said it is up to
Chinese leaders to decide the timing of any yuan revaluation, although he
believes a gradual currency revaluation would be the best option for China.
It won't be a surprise if the Chinese government soon shifts its currency
policy in the light of mounting inflationary pressure in the nation, although it
is up to China itself to decide the timing of any yuan revaluation, former US
Treasury Secretary John Snow said on Friday.
"Over time, some continuing gradual movement in the yuan will be in China's
interest; we're not pushing China, and the timing is certainly to be left to the
Chinese leaders who have much better appreciation of those issues," Snow told
China Daily on Friday at the Halter Financial Summit in Shanghai.
Snow made the comment amid growing speculation that China may soon resume
yuan appreciation following US Treasury Secretary Timothy Geithner's visit to
Beijing on Thursday. Details of his meeting with Vice-Premier Wang Qishan are
unavailable, but it is widely speculated that he came to further press for yuan
revaluation.
Commenting on Geithner's visit, Minister of Commerce Chen Deming said on
Thursday that the US trade deficit with China, which is behind its consistent
demand for yuan revaluation, is a result of its restrictive trade policies, not
China's currency policy.
The market conditions and openness of an economy rather than the exchange
rate policy have a major influence on which direction the trade balance swings,
Chen said. China has long criticized the US for restricting high-tech exports to
China, saying this contributes greatly to the US deficit with China.
Snow, who was US Treasury Secretary from 2003 to 2006, said a gradual
revaluation of the yuan is the best option for China.
"A radical departure will be a mistake, and China has to be cautious of other
competing considerations and then adjust it gradually," he said.
The yuan has appreciated 21 percent against the US dollar since July 2005,
but has remained largely unchanged since July 2008 as the country tried every
means to combat the global financial crisis.
The US government has decided to delay the release of a report on whether
China manipulates its currency, a move that is seen as a signal of easing
tension between the two sides. It's the right decision to postpone the report,
which gives China time to adjust its policy, Snow said. "It's wrong to name
China as a manipulator," he said.
Premier Wen Jiabao said in March that the yuan is not undervalued, but senior
officials have also said that the yuan has not risen against the dollar since
the worsening of the global financial crisis in 2008 doesn't mean it won't
change any more.
Snow also stressed that China will not face a decade-long stagnation like
Japan had after the latter raised its currency dramatically in the 1980s under
the pressure from the US and Europe.
He said China could sustain a growth rate ranging from 7 to 9 percent for a
long period, given its vast amount of labor and natural resources and the
growing strength of the private sector. |
