Paulson puts case for flexible yuan
A flexible yuan could help China control inflation and thus was in Beijing's interest, former US treasury secretary Henry Paulson said yesterday.
Paulson, who is in Hainan attending the Boao Forum for Asia, told the forum's secretary general, Long Yongtu, that China could do whatever it saw fit as a sovereign nation, but he suggested greater flexibility in the yuan's exchange rate.
'It is in China's interest,' he said. 'It gives the government a very valuable and ... increasingly necessary policy tool to deal with inflation.'
Inflation could be formidable for ordinary people, especially those who live on pensions, he said. Paulson's comments came three days after a meeting between his successor, Timothy Geithner, and Vice-Premier Wang Qishan, ended without announcement of any concrete results or any reference to yuan appreciation.
Four days before that meeting, Geithner decided to delay a scheduled April 15 decision on whether China is manipulating its currency.
US President Barack Obama is expected to raise the yuan's valuation with President Hu Jintao when the latter visits Washington this week to attend a summit on nuclear security.
In yesterday's talks with Long, Paulson pointed out that in the US, the revaluation of the yuan is seen as a 'symbol of China's commitment to reform'.
China had benefited enormously from economic reforms and it was important that the process continued, including revaluation of the yuan, he said. The two countries should keep communicating and looking for common interests.
Paulson met Vice-President Xi Jinping at the forum on Friday and talked with Premier Wen Jiabao in Beijing on Wednesday.
