U.S. urges APEC to pressure Chinese on yuan revaluation
U.S. urges APEC to pressure Chinese on yuan revaluation
Michael Mathes, Agence France-Presse, Phuket, Thailand
Chinese officials kept a low profile Thursday at a Pacific rim finance ministers meeting here as the U.S. expressed optimism the ministers would jointly urge APEC members, including Beijing, to adopt greater currency flexibility, officials said.
U.S. Treasury Secretary John Snow said he and APEC's 20 other ministers gathering here were on the verge of approving a joint statement that would put regional weight on Beijing to revalue its currency, the yuan.
"I'm hopeful that we will have a reference to desirability of moving to flexible in there, and I think there's a good chance for that," Snow told a press briefing.
"That's being discussed right now with the deputy minister (of China) in the meetings" of the Asia-Pacific Economic Cooperation finance ministers meeting. "I think it would be a real breakthrough."
"It would be a very positive development if you see the words flexibility, exchange rate flexibility in the communique," he added.
When pressed, however, Snow said the ministers expressed "varying degrees" of support for a clause on currency exchange regimes clearly aimed at Beijing,
"Some (were) more reluctant that others, and some more eager than others," he said.
"Our basic contention with them is it's in China's interest to move in this direction, because otherwise imbalances in the Chinese economy are inevitable."
China's vice minister of finance Lou Jiwei attended the opening sessions of the two-day forum, but he and his underlings have steered clear of the spotlight after a week in which Tokyo and Washington called for Beijing to ease controls on the yuan.
"They do not want to talk about anything," a Thai liaison officer told AFP. "Maybe next time."
Lou would not brief reporters gathered here for the meeting, which addresses efforts to broaden regional economic cooperation but is also touching on Asia-Pacific exchange rate policies, the officer said.
"There is no briefing today by the vice minister. I think you can understand why."
China played host this week to Snow, President George W. Bush's top economic advisor, who told Beijing its near decade- long peg to the U.S. dollar was due for a revamp.
His hosts repeatedly said that floating the yuan was a long- term goal but gave no timetable for liberalizing the exchange rate, offering instead what the treasury chief described as "interim steps."
Australian Treasurer Peter Costello said consensus on APEC's joint declaration had yet to be forged, and appeared to warn that a quick float of the yuan could lead to instability.
"Once an economy has reached a certain level of sophistication, a floating exchange rate gives it flexibility. It's one of the shock absorbers," Costello told reporters.
"We learned in the Asian financial crisis (of 1997 and 1998) that you can not do that overnight."
Prior to his China visit, Snow passed through Tokyo where he found common ground with top finance officials over desire to see Beijing let the market determine the yuan's value.
But on Wednesday Beijing refused to budge on its controversial currency peg, telling Snow it was in both countries' interest to keep a stable exchange rate.
The Chinese yuan has been pegged to the dollar for nearly 10 years and has plummeted in recent months in sync with the U.S. currency, giving Chinese exporters an unfair advantage, according to critics.
The U.S. trade deficit with China reached US$103 billion -- about a quarter of the total U.S. deficit -- in 2002. So far in 2003, it is up another 27 percent from last year.
Thai Prime Minister Thaksin Shinawatra, who opened the APEC session, said ministers had broached China's currency peg in Phuket but would not be drawn into the currency fray.
"It's their internal affair and internal strategy as well," he said. "They understand very well when they should" float the yuan.