Rubin backs China to hold firm on yuan<\/p>\n
KUALA LUMPUR (Reuters): U.S. Treasury Secretary Robert Rubin
\nleft China yesterday to embark on a whirlwind tour of crisis-torn
\nAsia, convinced that Beijing has the resolve to live up to its
\nnew image as an island of stability in the battered region.<\/p>\n
During his three-day stay in Beijing on the sidelines of U.S.
\nPresident Bill Clinton's state visit, Rubin received his
\nstrongest assurances yet that China will keep its yuan currency
\nstable to help prevent a renewed Asian financial thunderstorm.<\/p>\n
China's \"unambiguous\" promise not to devalue its currency came
\nas an obvious relief to Rubin since bolstering Beijing's resolve
\nto hold the line on the yuan has become a top priority on
\nWashington's agenda in Asia.<\/p>\n
Both Clinton and Rubin heaped praise on China for resisting
\nthe pressure to devalue in the face of financial turmoil, lauding
\nBeijing's \"statesmanship\" and forward-looking economic policies
\n-- even as they admitted it was in China's own interest to do so.<\/p>\n
A devaluation would cut the price of Chinese products in terms
\nof foreign currency, making it easier for the country's exporters
\n-- the backbone of China's economy -- to compete with other
\nnations whose currencies have been weakened.<\/p>\n
But China, in the midst of a historic economic transformation
\nthat has already brought about profound changes in the every day
\nlives of China's 1.2 billion people, knows there is no such thing
\nas a free lunch.<\/p>\n
\"One continues to be impressed by the vision expressed by
\ntheir leaders and by the understanding they express of the issues
\nthey face,\" Rubin told reporters accompanying him aboard an Air
\nForce jetliner en route to Malaysia.<\/p>\n
The U.S. Treasury chief last visited China nine months ago.<\/p>\n
Asked to compare his impressions now to what he had heard back
\nthen, Rubin said Beijing's commitment to overhauling its creaking
\neconomy and slowly opening it up to the outside world appeared to
\nremain strong.<\/p>\n
\"They continue to express a determination to move along at a
\ngood pace,\" he said.<\/p>\n
Still, the summit brought no breakthrough on Beijing's 10-year
\nlong effort to join the World Trade Organization, which the
\nUnited States continues to stall because it believes China needs
\nto do more to its vast domestic market to foreign competition.<\/p>\n
The ringing endorsement of Beijing's monetary stance was in
\nstark contrast to the continued pleading with the region's
\nerstwhile powerhouse, Japan, to finally do something -- anything
\n-- to get its sickly economy and weak yen back on its feet.<\/p>\n
Rubin, who on Friday also met Finance Minister Xian Huaicheng
\nand Prime Minister Zhu Rongji, the architect of China's reforms,
\nhas not ruled out the possibility of further intervention to help
\nthe yen.<\/p>\n
But Clinton yesterday lamented the lack of a magic \"wand\" to
\nmake Asia's crisis go away, and agreed with Rubin that the key to
\nthe yen's stability was Japan's own economic policies.<\/p>\n
\"We can be supportive, but they have to make the right
\ndecisions,\" he said.<\/p>\n
After a series of high-level meetings in Kuala Lumpur, Rubin
\nwas due to travel to Bangkok today and continue on to Seoul
\ntomorrow in a whistlestop tour of the region designed to take
\nAsia's economic pulse almost a year after its financial woes
\nbegan.<\/p>\n
Thailand and South Korea are among the hardest-hit of the
\nformer Asian tiger economies. Together with Indonesia, they are
\nat the receiving end of bail-out deals totaling more than US$120
\nbillion, drawn up by the International Monetary Fund and
\nconditional on harsh economic reform programs.<\/p>",
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