US Treasury team in capital for talks on revaluing renminbi
US Treasury officials yesterday started two days of talks on the renminbi with representatives of the People's Bank of China.
The visit by the six-member group is the first to follow up on US Treasury Secretary John Snow's trip to Beijing last September. Mr Snow's high-profile visit failed to pressure Beijing into revaluing the renminbi, but he did get an agreement for the two sides to work together to reform China's financial and banking system so the currency can float in the future.
'This is a technical group,' US embassy spokeswoman Sheila Paskman said. 'They have come to talk about a broad range of issues, mostly at the technical level. It's the first of a series of talks.'
Mr Snow said on US television that he was encouraged by the fact that Chinese officials were willing to work towards a flexible exchange rate. 'They accepted the proposition that they needed and wanted ... to move to a flexible currency arrangement,' he said.
'They pointed out, and I agreed with them, they couldn't do it tomorrow. It's going to take some time. But they're committed to moving there.'
Mr Snow recently appointed a US Treasury attache at the US embassy to monitor discussions on the currency issue.
Officials of the People's Bank of China refused to comment on the talks.
The bank yesterday posted its 2003 foreign exchange policy report on its website, which essentially outlines what will be discussed with the US Treasury team.
The report notes the large amount of foreign exchange speculation in global markets relating to the renminbi in recent months. The bank said it was committed to strengthening the nation's foreign exchange mechanism and to moving it towards market-determined exchange rates.
The bank also vowed to maintain exchange rate stability and fight off speculative market forces.
Wang Jian, a currency expert and economist at the State Council, said the bank was committed to reform but would not give in to strong-arm US pressure.
'The loosening-up on the exchange rate will be very small I can assure you,' Mr Wang said. 'Plus, with the recent rise in oil prices and China's shrinking trade surplus, there is very little room the government can move on this.'
