US Treasury Secretary Timothy Geithner has urged China to let the yuan appreciate as a critical part of its economic reforms.
Geithner, speaking after a Group of 20 finance ministers’ meeting, said the grouping had discussed “a more flexible exchange rate policy” in China. He said revaluing the yuan was an important part of the wider economic reforms pursued by Beijing to make its economy less dependent on exports and drive up the domestic demand.
“China has laid out ambitious reforms designed to strengthen growth in household income, consumption and to strengthen domestic demand. A necessary part of these reforms is to resume reform of their exchange rate mechanism,” he said.
In a communique following the two-day meeting, the G20 warned that the market convulsions sparked by Europe’s debt crisis posed major challenges to the global economy. They did not single out specific currencies for mention.
Critics of China’s currency policy say Beijing keeps the yuan artificially low to make the country’s exports cheaper than those of rivals.