25 Oct 2010

Geithner and Vice-Premier meet in China

6:00 am on 25 October 2010

United States Treasury Secretary Timothy Geithner has met Vice-Premier Wang Qishan of China at a time of tension over the value of China's currency, the yuan.

A US official says the two sides exchanged views on US-China economic relations, but no details were revealed.

The meeting was in the Chinese port of Qingdao. In a TV interview before going there, Mr Geithner said he believes China is now "committed" to allowing the yuan to go up in value.

Mr Geithner told Bloomberg Television that the Chinese "need the flexibility to run their policies in a way that makes sense for China".

He added: "And that requires that their exchange rate move up over time as they're now doing and we want to see that continue.

"They've got a ways to go, but I think they're committed to do that."

American officials have previously said that China keeps the value of the yuan artificially low to make its exports more competitive. Beijing rejects the accusation.

On Saturday, G20 finance ministers said they would refrain from such tactics.

Mr Geithner's visit to China came after a last-minute invitation from Mr Wang.

Earlier this year, China promised greater "flexibility" in its currency approach, but since then the yuan has only risen slightly in value.

Analysts in the US say the yuan remains undervalued by as much as 20%.