China and the United States will discuss the yuan’s value as well as the impact of U.S. monetary policy at a meeting this week, Chinese Vice Finance Minister Zhu Guangyao said on Monday.
Top Chinese and U.S. officials, including U.S. Treasury Secretary Jack Lew, will hold their annual talks in Beijing on July 9-10 at a meeting known as the Strategic and Economic Dialogue.
The United States pressed China to implement structural reforms in its exchange rate and to modify its “aggressive behavior” in disputed waters during a preliminary round of bilateral talks on Tuesday, senior U.S. officials said.
Lew has said he will push China to speed up economic reforms and do more to let the yuan rise against the dollar.
The dialogue will also touch on a bilateral investment treaty, which the U.S. hopes will loosen Beijing’s restrictions to allow for a more level playing field for U.S. companies.
Washington has also begun to push for China to move to a market-driven exchange rate, another U.S. official said after initial discussions on Tuesday. “Continued Chinese exchange rate reform will play a critical role in China’s success,” the official said.
Chinese officials have long argued that the yuan is near equilibrium after rising nearly one-third since its landmark revaluation in 2005, but the United States remains skeptical, pointing to the China’s solid trade surpluses.
“Both sides will conduct candid and deep policy dialogues on the RMB (yuan) issue and issues concerning China’s domestic financial reforms,” Zhu told reporters at a briefing.
Zhu said China had urged Washington to pay attention to the possible “spillover effect” of changes in its monetary policy on the world economy, as the Federal Reserve unwinds its quantitative easing.
“We hope the monetary policy of the United States, as the largest developed country and main reserve currency issuer, would be responsible,” Zhu said.
“As the quantitative easing ends and the process of rising interest rates – or monetary policy normalization – starts, we will have candid discussions with the U.S. side on its impact on the U.S. economy, the global economy, including China,” he added.
The annual high-level talks between the U.S. and China have yielded few substantive agreements, in part because relations have grown more complex with China’s increasing power.
JiaQingguo, dean of the School of International Studies at Peking University who has advised the government on diplomatic issues, doesn’t expect the talks to achieve much. “I don’t foresee many tangible results emerging. The relationship is at a low ebb. The role of SED now is to buttress the relationship to prevent a further deterioration,”Jia said.
Source:Reuters
Comments:
The stronger China becomes, the more intense are the US-China relationship. The two governments don’t see each other as partners anymore, rather dangerous competitors. U.S. criticizes China for the fact that it artificially lowers the rate of the yuan in order to stimulate the exports growth to America. However by constantly printing new money, including through the quantitative easing policy, the Federal Reserve also weakens the dollar against other world currencies.
It is obvious that the financial world has no friends, there are only enemies. And each financial empire is trying by all means to defend its interests and cause damage to its opponent.