Geithner and Chinese VP meet as currency issue looms large
BEIJING (AP) — US Treasury Secretary Timothy Geithner met with a Chinese vice premier yesterday and discussed economic ties in a sign the two sides might be trying to cool their rhetoric in a dispute over China's currency controls.
In a brief statement after their meeting, the Treasury Department did not say whether the two sides discussed currency, and phone calls to China's Finance Ministry were not answered. But Geithner had been expected to press Washington's case for Beijing to ease exchange rate controls that critics say distort trade.
Geithner, who stopped in Beijing after a two-day visit to India, left for Washington after the meeting.
The decision to hold such a high-level encounter suggested Washington and Beijing are trying to narrow their differences over currency, which threaten to overshadow cooperation on the global economy, Iran's nuclear programme and other issues.
"The two sides exchanged views on US-China economic relations, the global economic situation and issues relating to the upcoming economic track dialogue of the second US-China Strategic and Economic Dialogue, to be held in Beijing in late May," the Treasury statement said. A Treasury official, speaking on condition of anonymity because of the sensitivity of the discussions, said the meeting lasted 75 minutes and took place in the VIP terminal at Beijing International Airport. The official said the US side was represented by Geithner and David Dollar, Treasury's economic and financial emissary to China.
A Chinese Foreign Ministry spokeswoman, Jiang Yu, declined before the meeting to elaborate on the agenda, saying only that Vice Premier Wang Qishan and Geithner would "exchange ideas on US-China relations and other issues of mutual interest."
Critics say Beijing's controls keep its yuan undervalued, giving its exporters an unfair price advantage and swelling its multibillion-dollar trade surplus. Some American lawmakers want punitive tariffs on imports from China if Beijing fails to act.
The Obama administration delayed a report to Congress due April 15 in which it had the option of citing Beijing as a currency manipulator, a designation that could lead to a World Trade Organisation complaint and possible trade sanctions.
Beijing has publicly pushed back against the US pressure, with the Chinese commerce minister warning that a rise in the yuan's value would hurt exporters, who provide sizable employment.