China lobbies US to include yuan in IMF's reserve assets
Talks with visiting US Treasury chief Jack Lew also touch on new bank
Premier Li Keqiang urged the US to help make the Chinese currency part of the IMF's reserve assets during talks with visiting US Treasury Secretary Jack Lew on Monday.
Lew's trip, which came just before the deadline today for countries applying for founding membership in the China-led Asian Infrastructure Investment Bank (AIIB), had prompted speculation that Lew might discuss Washington's possible partnership with Beijing in the bank.
But a United States official said Lew made it clear that for now, the US would proceed through partnerships with other institutions. Chinese leaders told Lew they would welcome US membership of the bank, the US official said.
During the meeting, Li called on Washington to expedite its approval of reform proposals at the International Monetary Fund.
"We hope the US side will support the process to add the Chinese yuan to the existing basket of the Special Drawing Rights," Li said, referring to the IMF's "supranational" fund used to supplement members' official holdings. The Special Drawing Rights are derived from a basket of currencies - the US dollar, Japanese yen, euro and pound sterling, at market exchange rates.
Lew said late on Monday night that the US still had concerns over the AIIB. "We very much welcome China's increased participation in infrastructure investment, and the concerns we've raised about the needs for standards continue," Lew said.
"Our conversation was a cooperative and collaborative one about working together. The initial decisions of what kinds of projects are invested in will obviously be a very important signal as to how they'll proceed."
A senior US Treasury official said Lew told Chinese officials that the AIIB should work in partnership with existing international institutions to ensure high standards in lending. US officials oppose the AIIB's creation, saying it might undercut the World Bank or the IMF by extending credit without adequate environmental and social safeguards.
China scored a diplomatic coup when Britain, France and Germany broke with the US and joined Asian governments to seek AIIB membership.
Hao Hong, chief economist and managing director of Bocom International, said the US' participation in the AIIB was an opportunity for it to steer the bank's future direction from within.
"Previously, the US said its main concerns were the AIIB's ability to adhere to best practices. Yet in a world where standards are in a race to the bottom, such reasoning looks really pale," he said.
Lew also pressed Chinese leaders to suspend proposed curbs on foreign security technology, the US Treasury official said.
The US and Europe say China is improperly blocking access to its market with the curbs in proposed anti-terrorism and banking security measures. Chinese officials said their purpose was not to keep out US products, the US official said, without giving indications on whether Beijing would shift its stance.