Share This Article

Facebook LinkedIn
Twitter Reddit
Print Email
Pinterest Gmail
Yahoo
Money Morning
×
  • Invest
    • Best Stocks to Buy
    • Stock Forecasts
    • Stocks to Sell Now
    • Stock Market Predictions
    • Technology Stocks
    • Best REITs to Buy Now
    • IPO Stocks
    • Penny Stocks
    • Dividend Stocks
    • Cryptocurrencies
    • Cannabis Investing
    • AI Investing
  • Trade
    • How to Trade Options
    • Best Trades to Make Now
    • Options Trading Strategies
    • Weekly Trade Recommendations
  • Retire
    • Income Investing Guide
    • Retirement Articles
  • More
    • Money Morning LIVE
    • Special Investing Reports
    • Our ELetters
    • Our Premium Services
    • Videos
    • Meet Our Experts
    • Profit Academy
    • Postcards
Login Archives Your Team About Us FAQ
  • Invest
    • Best Stocks to Buy
    • Stock Forecasts
    • Stocks to Sell Now
    • Stock Market Predictions
    • Technology Stocks
    • Best REITs to Buy Now
    • IPO Stocks
    • Penny Stocks
    • Dividend Stocks
    • Cryptocurrencies
    • Cannabis Investing
    • AI Investing
    ×
  • Trade
    • How to Trade Options
    • Best Trades to Make Now
    • Options Trading Strategies
    • Weekly Trade Recommendations
    ×
  • Retire
    • Income Investing Guide
    • Retirement Articles
    ×
  • More
    • Money Morning LIVE
    • Special Investing Reports
    • Our ELetters
    • Our Premium Services
    • Videos
    • Meet Our Experts
    • Profit Academy
    • Postcards
    ×
  • Subscribe
Enter stock ticker or keyword
×
Join 100,000+ Like-Minded Investors Today
Twitter
Tags: China, China Currency, Dollar, Global Currency, Tim Geithner, Yuan

Geithner's China Jaunt May Signal Easing of Tensions on Yuan

By Don Miller, Contributing Writer, Money Morning • April 8, 2010

View Comments

Start the conversation

Leave a Reply Click here to cancel reply.

You must be logged in to post a comment.

In a surprise move, Treasury Secretary Timothy Geithner will meet with Chinese Vice Premier Wang Qishan in Beijing today (Thursday), as speculation increases that China is considering letting its currency, the yuan, rise against the dollar.

The unexpected meeting was arranged on-the-fly after Geithner's scheduled trip to India, and may be a sign that both countries are seeking to defuse the currency issue ahead of Chinese President Hu Jintao's trip to Washington next week.

The move follows the Treasury Department's decision last weekend to delay a decision on whether to label China a "currency manipulator."

"[China is] becoming more open to the world, and with that, you're going to see the [yuan] take on a broader role internationally," Geithner said in a Bloomberg Television interview in Mumbai as he finished preparations for the previously unscheduled visit to China. "That's a healthy, necessary adjustment."

Geithner will meet Wang, who helps oversee the nation's financial policy, on the return leg of a two-day visit to India. Geithner and Wang have been looking for "an opportunity to meet in person for some time." Andrew Williams, U.S. Treasury spokesman, told reporters.

The currency issue is sure to come up, although an agenda for the meeting, which will be closed to the media, has not been disclosed. China's Foreign Ministry declined to immediately comment on the matter, while the central bank, and commerce and finance ministries told The Wall Street Journal they were unaware of the meeting.

It is unlikely, however, that the meeting will result in any immediate announcement by Beijing of a change in its currency policy, as Chinese leaders have said repeatedly they won't make any policy change in response to public pressure from Washington.

Chinese President Hu Jintao and U.S. President Barack Obama are scheduled to meet next week on the sidelines of a nuclear-security summit in Washington. The U.S. has already announced the currency issue will be a matter of discussion between the two leaders.

Chinese government economists applauded the U.S. Treasury's decision this week to delay its semiannual report to Congress. The decision was seen as a concession from the United States and has fueled speculation that China might adjust its exchange rate policy in coming months.

A growing number of U.S. lawmakers have implored the administration to label China a "currency manipulator" in the report, claiming Beijing deliberately undervalues the yuan to give its exports a competitive advantage in global markets.

The Chinese currency has been effectively pegged against the dollar since mid-2008, after appreciating slightly during the three years prior to the recession. Although the manipulator label would be largely symbolic, Beijing has expressed anger over the idea and such a move could complicate the decision over whether to let the yuan rise.

Chinese officials have been vague about their plans for the currency.

Central bank governor Zhou Xiaochuan said last month that "sooner or later" China will end the contingency measures it adopted during the global recession. And other senior officials have contended that a yuan appreciation might hurt China's exporters.

Chinese Premier Wen Jiabao has repeatedly rejected calls to let the yuan appreciate.

"I don't think the renminbi is undervalued," Wen said at a press conference in Beijing, using the Chinese currency's official name.

Some economists increasingly think a widening of the yuan's daily trading band might be a likely compromise solution, because it would allow China to publicly signal it is moving towards more flexibility, while allowing it to retain control over the direction of the yuan's value, The Journal reported.

Trading in Yuan forwards in Hong Kong pushed futures near the highest level in 11 weeks on speculation the central bank will scrap the 21-month-old peg to the dollar as part of efforts to limit inflation.

The trading means investors were betting the currency will climb 2.9% from the spot rate of 6.8256, Bloomberg reported. A stronger yuan would make imports cheaper and to help contain inflation, which reached a 16-month high of 2.7% in February.

News & Related Story Links:

  • Bloomberg:
    Geithner Says China to Pursue ‘Broader' Role for Yuan
  • Wall Street Journal:
    Geithner Plans to Meet China Vice Premier
  • Money Morning:
    China Manufacturing Data Could Presage a Rising Yuan
  • Money Morning:
    Chinese Premier Wen Rejects U.S. & European Pleas, Says Yuan to Stay Stable
  • Bloomberg:
    U.S. Economy: Manufacturing Jumps in Sign of Sustained Rebound
  • Money Morning:
    U.S. China Currency Dispute Heating Up

Here Are 10 “One-Click” Ways to Earn 10% or Better on Your Money Every Quarter

Appreciation is great, but it’s possible to get even more out of the shares you own. A lot more: you can easily beat inflation and collect regular income to spare. There are no complicated trades to put on, no high-level options clearances necessary. In fact, you can do this with a couple of mouse clicks – passive income redefined. Click here for the report…

Claim My Free Report

Subscribe
Login
Notify of
guest

guest

1 Comment
Oldest
Newest Most Voted
Inline Feedbacks
View all comments
Jeff Pluim
Jeff Pluim
13 years ago

It is more likely that Geitner is meeting in China to persuade the Chinese to continue to buy U.S. T-bills. Although the yuan is probably undervalued, U.S.A.'s most pressing issue right now is not the value of the yuan. If the next issue of USD T-bills are not bought by China, that will trigger a huge pannick in the markets because it will expose the weakness of the U.S. monetary policy that will scare the bejeebers out of investors. Interest rates will have to rise in order to sell the T-bills, and the rise in interest rates will sink the American economy.

0
Reply


Latest News

September 22, 2023 • By Shah Gilani

earnings
Why the Fed's "Higher for Longer" Message on Interest Rates is Bogus

September 22, 2023 • By Tom Gentile

This is the Top 'Worst-in-Breed' Stock Heading into October

September 21, 2023 • By Shah Gilani

earnings
The Best Auto Stocks to Buy (or Avoid) Right Now
Trending Stories
ABOUT MONEY MORNING

Money Morning gives you access to a team of market experts with more than 250 years of combined investing experience – for free. Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning.com visitors become smarter, more confident investors.

QUICK LINKS
About Us COVID-19 Announcements How Money Morning Works FAQs Contact Us Search Article Archive Forgot Username/Password Archives Profit Academy Research Your Team Videos Text Messaging Terms of Use
FREE NEWSLETTERS
Total Wealth Research Power Profit Trades Penny Hawk Midday Momentum
PREMIUM SERVICES
Money Map Press Home Money Map Report Fast Fortune Club Weekly Cash Clock Microcurrency Trader Hyperdrive Portfolio Rocket Wealth Initiative Quantum Data Profits Flashpoint Trader Darknet Alpha Accelerators Brutus Alerts Resource Traders Alliance L.A.U.N.C.H. Investor Rob Roy Trader Long-Term Equity Profits

© 2023 Money Morning All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning.

Address: 1125 N Charles St. | Baltimore, MD, 21201 | USA | Phone: 888.384.8339 | Disclaimer | Sitemap | Privacy Policy | Whitelist Us | Do Not Sell or Share My Personal Information

wpDiscuz