U.S. Treasury Secretary John Snow will meet Chinese economic and finance officials during a week in China, and will urge Beijing to further revalue its currency, the yuan. Even before he arrived in China, however, Beijing sent the message that it would move at its own pace on the currency issue.
Speaking in Tokyo before leaving for China Tuesday, Mr. Snow said he was anxious to see the Chinese allow market forces to play a larger role in setting the value of the yuan.
U.S. manufacturers and some lawmakers say the Chinese currency is grossly undervalued, and has cost American jobs as cheap Chinese goods have flooded into the United States.
The Chinese government took note of Mr. Snow's comments Tuesday, but made it clear that it is no hurry to make changes to its currency exchange system.
At a regular press conference in Beijing, China's Foreign Ministry spokesman, Kong Quan, said many factors would determine when China decides to revalue.
"This is fundamentally a question of a country's sovereignty. On the basis of our own rhythm and speed, in accordance with China's economy, and especially in accordance with the world economy, we will use the most beneficial method to gradually move forward China's reform of the renminbi [yuan] exchange rate mechanism," he said.
China ended a decade-long currency peg to the U.S. dollar in July and revalued the yuan, after coming under pressure from the United States. However, the dollar is still a major element in setting the yuan's value, and critics say the revaluation, at 2.1 percent, was not enough.
American manufacturers say China's fixed-rate currency system is a major cause of the United States' massive trade deficit with China, which last year hit a record $162 billion.
Last week, China's state media reported the country's overall trade surplus could triple this year to $100 billion, inviting even more pressure on Beijing to allow the yuan to appreciate.
While in China, Mr. Snow will be joined by U.S. Federal Reserve Chairman Alan Greenspan for a meeting of finance ministers and central bankers from the Group of 20, a grouping of wealthy countries and such emerging economies as China, India and Brazil.
Mr. Snow and Mr. Greenspan are also to see Chinese officials at a meeting of the Joint Economic Commission, a regular forum in which U.S. and Chinese officials can discuss issues of mutual economic concern.
