The Chinese government kept its currency from appreciating during the financial crisis but allowed it to rise in 2010, to the satisfaction of the Obama administration and American exporters. Recently, however, China has been holding back on the pace of the appreciation. Related Article »
The pace of appreciation of the Chinese currency against the dollar has slowed in the last year, ensuring that China’s manipulation of its exchange rate remains a central topic as Treasury Secretary Timothy F. Geithner arrives in Beijing for the annual dialogue between the nations. Enlarge This Image
Agence France-Presse — Getty Images
In Washington’s view, Chinese goods, like circuit boards, should be more costly in dollar terms. Multimedia
A Slower Rise for the Renminbi
While praising the Chinese government for its progress, Treasury officials have promised to maintain the pressure. “The process of correcting the misalignment of the exchange rate remains incomplete,” Mr. Geithner said in a speech in April. “The Chinese currency needs to appreciate further against the dollar and the other major currencies.” The Chinese government has been holding back the pace of appreciation, which makes Chinese goods relatively more expensive and American goods relatively cheaper. With bond yields spiraling in Italy and Spain last winter, the World Bank and International Monetary Fund warned of recessions across Europe, sluggish growth in the United States and Japan and the possibility of hard landings in fast-growing emerging economies, like China’s. Economic issues have been overshadowed by diplomatic ones in advance of Mr. Geithner’s meetings Thursday, which will include Secretary of State Hillary Rodham Clinton and officials from the upper echelons of the Chinese government. Last week, Chen Guangcheng, a blind human rights lawyer, escaped from Chinese security forces and sought refuge in the United States Embassy in Beijing. On...