US Tells China To Revalue Yuan By 10% Vs Dollar - FT
05/23/2005
Dow Jones News Services
TOKYO (Dow Jones)--The U.S. Treasury has told China that it must revalue its currency by at least 10% against the dollar to prevent protectionist legislation in the U.S. congress, the Financial Times reported in its international edition Tuesday.
Henry Kissinger, former U.S. secretary of state, is one of a number of unofficial envoys who have impressed upon China the urgent need for action, on the 10% target and on the seriousness of the threat from Congress, people familiar with the administration's efforts told the FT.
As well as the minimum 10% target revaluation, Kissinger was briefed by the Treasury on the need for other measures, such as a shift to a currency band against the dollar or a basket against a number of currencies to replace the peg.
Bill Rhodes, senior vice chairman of Citigroup Inc. (C), and Brent Scowcroft, national security adviser to former U.S. President Gerald Ford and former President George H. W. Bush, have also acted as unofficial envoys on behalf of the administration, the FT said.
Rhodes declined to comment on talks with Beijing but said: "Apart from any external pressure, I think it's in China's interests in the coming months to move towards a market interest rate regime, accelerate the opening of the capital accounts, and move to a more flexible exchange rate system," according to the FT.
Tony Fratto, U.S. Treasury spokesman, refused to comment on the 10% minimum target. "We have made it clear that the interim step should be of sufficient magnitude and flexibility to quell speculative financial flows," he said, according to the FT.
On the missions of Kissinger and others who have spoken to Beijing, Fratto said: "Without commenting on particular individuals, I would say it is important for the Chinese authorities to hear from respected individuals who can provide an accurate analysis of the American political environment." |
