US Secretary Complaints About Yuan Exchange Rate Controls

The U.S. treasury secretary pressed China on Tuesday to ease exchange rate controls and lower barriers to trade and investment.

Beijing in March widened the narrow band in which it allows its yuan to fluctuate against the U.S. dollar. But it retained controls that critics complain keep the yuan undervalued and give its exporters an unfair price advantage.

“It is important that China demonstrate a renewed commitment to move to a more market-determined exchange rate,” said Treasury Secretary Jacob Lew in a statement before a meeting with China’s top economic official, Premier Li Keqiang.

Lew appealed for a “more transparent exchange rate policy.”

Washington wants a more “open, balanced” trade and investment relationship, Lew said. He said that would include opening China’s markets wider to foreign investment and ensuring equal treatment for all companies.

Lew expressed similar sentiments earlier Tuesday in a meeting with a deputy premier, Wang Yang.

Communist leaders have promised to give entrepreneurs and market forces a bigger role in China’s state-dominated economy in hopes of making it more efficient and productive.

via Mainichi

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza