China rebuffs Geithner over currency

An adviser to China’s central bank has rebuffed criticism from the US over Beijing’s exchange rate policy. In a speech in Beijing, Li Daokui said China “will not appreciate the yuan solely because of external pressure”. His comments follow strong criticism in America that the yuan is significantly undervalued, damaging US exports.

Last week US the Treasury Secretary, Timothy Geithner, said he was considering ways to press China to let the yuan appreciate. In June, after months of pressure from the US, China pledged to relax its grip on its currency. But on Thursday Mr Geithner renewed the criticism, saying that the yuan’s value was “essentially” unchanged because of “very substantial” intervention by authorities.

China denies keeping its currency artificially cheap, and has warned against foreign pressure over what Beijing regards as an internal matter.

Mr Li said: “China as it stands now is not Japan in 1985, it is not a country that completely relies on external demand.” That was a reference to a 1985 accord where Japan agreed to let its yen currency appreciate against the dollar.

Bloomberg

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