WASHINGTON – The Bush administration, which failed to win new promises on currency flexibility from Chinese President Hu Jintao, pushed ahead on the issue Monday with meetings involving China's top financial market regulators.
U.S. officials said the meeting of the U.S.-China financial market working group would not address currency flexibility specifically but would explore all of the reforms that China will need to introduce to allow the value of the yuan to float freely with its value set by market forces.
The administration had been hoping that Hu would signal during his summit meeting with President Bush last Thursday that China was ready to move more quickly to revalue its currency. But Hu gave no indication that the revaluation of the yuan will be accelerated.
American manufacturers contend that the Chinese currency is undervalued by as much as 40 percent, making Chinese goods cheaper in the United States and American products more expensive in China. They say it is playing a significant role in America's record $202 billion trade deficit with China.
Treasury Department officials said that a report that could brand China a "currency manipulator" will be sent to Congress within the next two weeks but they would not address how the Hu visit and meetings with Chinese officials in conjunction with the spring meetings of the International Monetary Fund and World Bank would impact that decision.