News / Economy

Market Access, Currency Value to Top US-China Dialogue

FILE - Treasury Secretary Jacob Lew
FILE - Treasury Secretary Jacob Lew
Victor Beattie

U.S. Treasury Secretary Jack Lew says the pace of economic reform and the need for further appreciation of China’s currency will be among the issues at next week’s (July 9, 10) Strategic and Economic Dialogue in Beijing.  Lew also does not see cyber-spying as an impediment to improving relations between the world’s top two economies.

Speaking Tuesday to the U.S.-China Business Council, Lew said he expects further progress at next week’s dialogue. He pointed to China’s commitment to open its economy more to outside investment and said that since 2010, China’s currency, the yuan (RMB), has appreciated 14 percent.

"It still needs to appreciate more, it’s still undervalued, and that is something that hurts Chinese consumers.  It reduces their purchasing power. One of the things that’s so important in terms of China’s economy is to increase consumer demand.  But, it’s fundamentally not fair in terms of trading practices, which is why we press on it so hard," said Lew.

Lew said this is a threshold issue that is fundamental to the trust between the two countries. An undervalued currency tends to boost Chinese exports and hurts foreign competition.

He said China has widened the trading band of its currency in recent weeks, but described progress as taking two steps forward and at least part of a step back in getting towards a market-determined exchange rate.

Gary Hufbauer of the Peterson Institute for International Economics sees U.S. demands for greater currency appreciation as a non-starter for China:

"China is tightening up credit. This is causing a bit of a slowdown in economic activity in China. Also, China has a major anti-corruption campaign. You see these generals being arrested, which is extending right down into the provinces, and that’s cutting back on the big projects in the provinces. One of the offsets that the Chinese government is doing to keep business going is to resist appreciation of the renminbi," said Hufbauer.

Lew said a market-determined exchange rate coupled with a more open Chinese economy will be good for the U.S. economy and American businesses’ ability to compete on a level playing field.

"Frankly, I think it’s in China’s interest.  If you look at China’s core economic plan, what they’ve put in their Third Plenum, the issues that I’ve just described are central to what they’ve adopted as their stated program.  So, that’s why I am optimistic we’ll continue to make progress," said Lew.

Lew said progress has been mixed after China’s announcement of the Shanghai free-trade zone.

"I think it’s been, you know, a slow process.  I think it started out with almost everything being put on the ‘closed’ list. Now, as things are taken off the ‘closed’ list, we’re finding that, just yesterday, a list came out, so we haven’t fully digested it.  But, on first glance, it doesn’t appear to be of major interest for U.S. market access. So, it seems to be items that give you a number of things that are open, but not a lot of business activity," said Lew.

The Shanghai free-trade zone is being viewed as a template for ongoing negotiations on a bilateral investment treaty (BIT).

Hufbauer said the slow pace of reform in China is due, in part, to efforts by China’s new leadership to consolidate its control over the country’s vast national and provincial economies.

Lew praised the Chinese for their focus on enforcement of intellectual property protection, but called for a more sustained, continuous efforts to establish so-called “rules of the road.”

Lew also hopes the discussion on cyber-security, especially in light of recent allegations of hacking by Chinese military personnel of U.S. corporate trade secrets, will continue.

"There is a fundamental difference that we do not view it as an acceptable practice for governmental entities to participate in the process of, you know, securing trade secrets for the economic benefit of firms in their country. And, we’ve made that clear in a general way. We’ve made it clear in a rather specific way. And, I don’t think there’s any question but it’s a source of some difference between us. We need to engage on that, and we need to continue to engage on that, and I believe that there will be ongoing discussions," said Lew.

China says it, too, is a victim of U.S. cyber-spying. Hufbauer says the Obama Administration is trying to make the distinction between commercial espionage and governmental spying.

The U.S. Treasury chief says China’s real estate market bubble does not likely pose a global threat to financial stability. He says the country has the tools necessary to manage it internally.

Hufbauer said that as the two sides sit down next week in Beijing, U.S./China economic ties are much stronger than bilateral geopolitical relations, where the two sides view each other more as competitors.

You May Like

China’s Influence Grows With New Infrastructure Bank

Multibillion-dollar China-backed and BRICS-supported Asian Infrastructure Investment Bank seen as possible challenger to such lenders as IMF, World Bank More

Video Rabbi Hits Road to Heal Jewish-Muslim Relations in France

Rabbi Michel Serfaty makes the rounds in his friendship bus to encourage dialogue and break down barriers between the two groups More

Post-deal Iran Leaders Need 'Economic Momentum' to Solidify

Economists say deal could inject more than $100 billion into coffers - not enough to entirely rescue ailing economy - but maybe adequate to create 'economic momentum' More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
US Gay Marriage Ruling Yields Real-life Impacti
X
Michael Bowman
June 28, 2015 10:05 PM
Friday’s landmark Supreme Court decision legalizing same-sex marriage throughout the United States is an outcome few thought possible just years ago, and shows a nation that increasingly tolerates and even celebrates the hopes and aspirations of gay people. VOA’s Michael Bowman spoke to a same-sex couple that will benefit from the high court ruling, and to a Christian scholar who is apprehensive about its potential consequences for America’s faith community.
Video

Video US Gay Marriage Ruling Yields Real-life Impact

Friday’s landmark Supreme Court decision legalizing same-sex marriage throughout the United States is an outcome few thought possible just years ago, and shows a nation that increasingly tolerates and even celebrates the hopes and aspirations of gay people. VOA’s Michael Bowman spoke to a same-sex couple that will benefit from the high court ruling, and to a Christian scholar who is apprehensive about its potential consequences for America’s faith community.
Video

Video Syrians Flee IS Advance in Hasaka

The Syrian government said Monday it has taken back one of several districts in Hasaka overrun by Islamic State militants. But continued fighting elsewhere in the northern city has forced thousands of civilians from their homes. In this report narrated by Bill Rodgers, VOA Kurdish Service reporter Zana Omer describes the scene in Amouda, where some of the displaced are taking refuge.
Video

Video Rabbi Hits Road to Heal Jewish-Muslim Relations in France

France is on high alert after last week's terrorist attack near the city Lyon, just six months after deadly Paris shootings. The attack have added new tensions to relations between French Jews and Muslims. France’s Jewish and Muslim communities also share a common heritage, though, and as far as one French rabbi is concerned, they are destined to be friends. From the Paris suburb of La Courneuve, Lisa Bryant reports about Rabbi Michel Serfaty and his friendship bus.
Video

Video S. Korea Christians Protest Gay Rights Festival

The U.S. Supreme Court decision mandating marriage equality nationwide has energized gay rights supporters around the world. Gay rights remain a highly contentious issue in a key U.S. ally, South Korea, where police did a deft job Sunday of preventing potential clashes between Christian protesters and gay activists. Kurt Achin reports from Seoul.
Video

Video Saudi Leaks Expose ‘Checkbook Diplomacy’ In Battle With Iran

Saudi Arabia’s willingness to wield its oil money on the global diplomatic stage appears to have been laid bare, after the website WikiLeaks published tens of thousands of leaked cables from Riyadh’s Ministry of Foreign Affairs. VOA's Henry Ridgwell reports.
Video

Video Nubians in Kenya Face Land Challenges

East Africa's ethnic Nubians have a rich cultural history that dates back thousands of years, but in Kenya they are facing hardships, including the loss of lands they have lived on for generations. They say the government has reneged on its pledge to award them title deeds for the plots. VOA's Lenny Ruvaga reports.
Video

Video Syrian Refugees Return to Tal Abyad

Syrian refugees in Turkey confirm they left their hometown of Tal Abyad because of intense fighting and coalition airstrikes, not because Kurdish fighters were engaged in ethnic cleansing, as some Turkish officials charged. VOA Kurdish Service reporter Zana Omer, in Tal Abyad, finds that civilians coming back to the town agree, as we hear in this report narrated by Roger Wilkison.
Video

Video Military Experts Question New Russian Tank Capabilities

Russia has been showing off its new tank design – the Armata T-14. Designers claim it is 20 years ahead of current Western designs - and driving it feels like playing a computer game. But military analysts question those assertions, and warn the cost could be too heavy a burden for Russia’s struggling economy. Henry Ridgwell reports.
Video

Video In Kenya, Police Said to Shoot First, Ask Questions Later

An organization that documents torture and extrajudicial killings says Kenyan police were responsible for 1,252 shooting deaths in five cities, including Nairobi, between 2009 and 2014, representing 67 percent of all gun deaths in the areas reviewed. Gabe Joselow has more from Nairobi.
Video

Video In Syrian Crisis, Social Media Offer Small Comforts

Za’atari, a makeshift city in Jordan, may be the only Syrian refugee camp to tweet its activities, in an effort to keep donors motivated as the war in Syria intensifies and the humanitarian crisis deepens. Inside the camp, families say mobile phone applications help hold together families that are physically torn apart. VOA’s Heather Murdock reports.
Video

Video Chemical-Sniffing Technology Fights Australia's Graffiti Vandals

Cities and towns all over the world spend huge amounts of resources battling graffiti writers who deface buildings, public transport vehicles and even monuments. Authorities in Sydney, Australia, hope a new chemical-sniffing technology finally will stop vandals from scribbling on walls in the passenger areas of commuter trains. VOA’s George Putic has more.
Video

Video Cambodia Struggling to Curb Child Labor

Earlier this year a United Nations report found 10 percent of Cambodian children aged 7-14 are working – one of the highest rates in the region – and said one in four children in that age bracket are forced to quit school to help their families. Although the child labor rate has dropped over the past decade, Cambodia has a lot more to do – including keeping more children in school. Robert Carmichael reports for VOA from Phnom Penh.

VOA Blogs

World Currencies

EUR
USD
0.8926
JPY
USD
123.71
GBP
USD
0.6358
CAD
USD
1.2364
INR
USD
63.600

Rates may not be current.