Snow: Let 皇冠体育app decide on RMB

Economy

Snow: Let 皇冠体育app decide on RMB

By Zhou Yan (皇冠体育app Daily)
Updated: 2010-04-10 09:04

John Snow, former US Treasury Secretary, said it is up to Chinese leaders to decide the timing of any yuan revaluation, although he believes a gradual currency revaluation would be the best option for 皇冠体育app. [YONG KAI / CHINA DAILY]

SHANGHAI - It won't be a surprise if the Chinese government soon shifts its currency policy in the light of mounting inflationary pressure in the nation, although it is up to 皇冠体育app itself to decide the timing of any yuan revaluation, former US Treasury Secretary John Snow said on Friday.

"Over time, some continuing gradual movement in the yuan will be in 皇冠体育app's interest; we're not pushing 皇冠体育app, and the timing is certainly to be left to the Chinese leaders who have much better appreciation of those issues," Snow told 皇冠体育app Daily on Friday at the Halter Financial Summit in Shanghai.

Snow made the comment amid growing speculation that 皇冠体育app may soon resume yuan appreciation following US Treasury Secretary Timothy Geithner's visit to Beijing on Thursday. Details of his meeting with Vice-Premier Wang Qishan are unavailable, but it is widely speculated that he came to further press for yuan revaluation.

Commenting on Geithner's visit, Minister of Commerce Chen Deming said on Thursday that the US trade deficit with 皇冠体育app, which is behind its consistent demand for yuan revaluation, is a result of its restrictive trade policies, not 皇冠体育app's currency policy.

The market conditions and openness of an economy rather than the exchange rate policy have a major influence on which direction the trade balance swings, Chen said. 皇冠体育app has long criticized the US for restricting high-tech exports to 皇冠体育app, saying this contributes greatly to the US deficit with 皇冠体育app.

Snow, who was US Treasury Secretary from 2003 to 2006, said a gradual revaluation of the yuan is the best option for 皇冠体育app.

"A radical departure will be a mistake, and 皇冠体育app has to be cautious of other competing considerations and then adjust it gradually," he said.

The yuan has appreciated 21 percent against the US dollar since July 2005, but has remained largely unchanged since July 2008 as the country tried every means to combat the global financial crisis.

The US government has decided to delay the release of a report on whether 皇冠体育app manipulates its currency, a move that is seen as a signal of easing tension between the two sides.

It's the right decision to postpone the report, which gives 皇冠体育app time to adjust its policy, Snow said. "It's wrong to name 皇冠体育app as a manipulator," he said.

Premier Wen Jiabao said in March that the yuan is not undervalued, but senior officials have also said that the yuan has not risen against the dollar since the worsening of the global financial crisis in 2008 doesn't mean it won't change any more.

Snow also stressed that 皇冠体育app will not face a decade-long stagnation like Japan had after the latter raised its currency dramatically in the 1980s under the pressure from the US and Europe.

He said 皇冠体育app could sustain a growth rate ranging from 7 to 9 percent for a long period, given its vast amount of labor and natural resources and the growing strength of the private sector.