Action on yuan tops Snow agenda

US Treasury Secretary John Snow arrived in China yesterday at the start of a week-long visit crucial to his department's decision on whether Beijing is manipulating its currency and should be subject to trade sanctions.

He will urge leaders to let the yuan rise, but will be told that China needs more time to introduce a market-driven system and that the budget deficit and low savings rate in the US are the main causes of its trade deficit and imbalances in the global economy.

Mr Snow arrived in Shanghai from Tokyo yesterday afternoon and later addressed US businessmen at the American Chamber of Commerce. Today he is due to tour the city's stock exchange, hold a news conference and leave for the western city of Chengdu .

From there he will go to Beijing, where he will meet President Hu Jintao and Premier Wen Jiabao , and attend the weekend meeting of the Group of 20, bringing together finance ministers and central bankers from the world's 20 key economies.

In press briefings in Tokyo yesterday, Mr Snow left no doubt as to what he would tell Chinese leaders.

'We need to see in the marketplace the movement of the currency. That is the best evidence of the commitment to move forward. The important thing is not just what is said but what is done.'

He said this was the view not only of the United States but also other main economies, the International Monetary Fund, the Group of Seven major industrialised countries and the G20.