The Chinese government is widely expected to announce a change in the currency rate to allow a stronger yuan, possibly before President Hu Jintao meets with President Obama in Washington next week. The New York Times reports:
A change in Chinese currency policy would be a political windfall for President Obama and Treasury Secretary Timothy F. Geithner, who have maintained a scrupulous silence on the issue over the past month despite intense pressure from Congress for a confrontation with Beijing. Many members of Congress and economists say that by spending several hundred billion dollars each year to hold down the value of the renminbi, China has made its exports extremely competitive in foreign markets and taken away sales from manufacturers in the United States and other countries.
While any announcement could still be delayed, China’s central bank appears to have prevailed with its arguments within the Chinese leadership for a stronger but more flexible currency, known as the renminbi or yuan, the people with knowledge of the consensus said.
Insisting on anonymity because of the sensitivity of the issue in Beijing, they predicted that China’s policy shift could easily come before President Hu Jintao arrives in Washington next week for discussions with Mr. Obama and other world leaders on improving nuclear security.
