US Treasury Secretary Henry Paulson called Wednesday for an immediate revaluation of the Chinese currency after Beijing announced moves to tighten monetary policy for the first time in a decade.
He said that allowing flexibility of the tightly-controlled yuan was critical to cool the world’s fastest growing economy battling serious inflationary pressures.
“A more flexible currency is especially important now, when the risks of inflation are clearly rising in the Chinese economy,” Paulson said ahead of high-level talks between Washington and Beijing on key economic issues. [Full Text]
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The so-called Strategic Economic Dialogue comes as the United States pushes China to improve the safety of its exports in light of a string of high-profile recalls of various items ranging from toys to toothpaste.
China’s ability to manage the safety of its goods, Paulson said, will be an important part of Beijing’s future growth and its trade relations with the United States. A complaint from some in China that the U.S. focus on the matter stems from a strategy to restrict Chinese imports “has no basis in fact,” he said. [Full Text]