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Snow: Punitive bills on China 'ill-conceived'
(Reuters)
Updated: 2005-10-17 16:13 CHINA ON THE MOVE
"Moving to a truly flexible exchange rate requires a lot of preparatory
steps. China is seriously engaged in taking these preparatory steps," Snow said.
"These are the things that give me encouragement."
The U.S. Treasury is due to report next month whether it judges China to be
manipulating its currency, a finding that could result in punitive trade
measures against it. Some law-makers are separately proposing to slap tariffs of
as much as 27.5 percent on China unless it unshackles the yuan.
Snow called these legislative proposals "ill-conceived" and said he was
hopeful of being able to point to progress China was making toward more-open
markets.
"But it does have some support. We have to acknowledge
that," he said.
"But we need to see movement," the U.S. Treasury chief added. "Let's make no
mistake about it. Congress will demand to see movement."
Over the course of his Chinese visit, Snow and the delegation of senior
officials accompanying him have sought to broaden the discussion of U.S.-Chinese
economic relations beyond currency to include easier access for U.S. firms to
Chinese banking, investment and other financial services industries.
Still, nearly every question at the press conference dealt with the U.S.
effort to persuade China to adopt a more flexible currency.
Snow said the U.S. had no timetable for China to act but said the long-term
goal was a freely floating Chinese currency. "The real objective is to see the
Chinese currency eventually be fully flexible, eventually to move like the
dollar and the euro and other fully floating currencies," he said.
Snow declined to say whether the encouraging signs he had heard from Chinese
officials made it less likely that China would be named a currency manipulator
in next month's report.
"I don't want to foreshadow what we will conclude," Snow said. "You know what
we said last time and we're going to continue to look for signs of real
progress."
In May, Treasury warned that China likely would be named a manipulator if it
did not amend its currency regime. Beijing did drop its currency peg in July and
modestly revalued the yuan, but the United States wants to keep the pressure on
for more action.
"We will continue to look hard at the situation and try and evaluate whether
or not sufficient progress is being made," Snow said.
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