taxcheater big mouth: White House Aims to Defuse Furor Over China's Yuan Policy
By TOM BARKLEY and HENRY PULIZZI
WASHINGTON -- The White House tried to play down criticism of China's currency policies by Timothy Geithner, President Barack Obama's nominee to be Treasury secretary.
The White House, noting it wants to establish a "comprehensive" economic relationship with China, said it won't make a determination about that country's currency until Treasury provides a report to Congress in the spring.
White House Spokesman Robert Gibbs avoided repeating the view of Timothy Geithner, who said in written testimony for his confirmation hearings that President Obama, "backed by the conclusions of a broad range of economists -- believes that China is manipulating its currency." Though the U.S. has long pushed China to move to a market-based system for managing the yuan, it has resisted officially branding Beijing a manipulator.
Over the weekend, a top official in China's central bank, alluding to Mr. Geithner's comments, said the charge that Beijing manipulates its currency was inaccurate and implied there were bigger issues to address in the global financial crisis.
"In recent days persons in a Western country have said 'China is manipulating the yuan exchange rate,'" People's Bank of China Vice Governor Su Ning said, according to a report Saturday by the state-controlled Xinhua news agency. "These remarks are not only inconsistent with the facts, but they are misleading about the reasons for the financial crisis."
On Monday, the International Monetary Fund's managing director said China's currency is "significantly undervalued" and the country's economy should become less driven by exports.
"We need that the Chinese change their policy, try to have less export-led growth, shifting to domestic-led growth," IMF chief Dominique Strauss-Kahn said.
During a panel discussion at Georgetown University, Mr. Strauss-Kahn said labels like currency manipulation aren't the point; rather, it is that China's economy become more balanced.
Many Chinese officials are convinced it's in their best interest to rebalance their economy, Mr. Strauss-Kahn said. But with the global economy "collapsing," the main concern is to support growth rather than deal with the longer-term imbalances, he added.
Mr. Strauss-Kahn said he is surprised the global financial crisis hasn't hurt the value of the dollar and noted that while stimulus is an important part of economic recovery, the main priority is to restore the global financial system.
Write to Tom Barkley at tom.barkley@dowjones.com and Henry Pulizzi at henry.pulizzi@dowjones.com |
