US delegation to China to push for more trade, currency reforms
24 Nov 2006
In a bid to reduce its trade deficit with China a team of senior US government representatives will visit Beijing in December to urge China to amend its economic policies.
Dubbed as a strategic economic dialogue, the team, comprising Ben Bernanke, chairman of the US Fed, Henry Paulson treasury secretary and other senior members of the US cabinet, to press for the yuan to be allowed to appreciate, reduce barriers to foreign investment and take effective measures to curb piracy and theft of intellectual property.
The mission of the delegation has aroused interest because it is extremely rare for the head of the Fed and the treasury secretary to meet their counterparts together on economic talks.
While trade with the US has built up a record deficit for the US, China has created a record surplus for its economy — its trade surplus with the rest of the world hit a record $23.8 billion in October. Analysts have forecast that China''s trade surplus will reach $160 billion from January to end December — a 60 per cent rise on 2005.
On 6 November, 2006, China''s foreign exchange reserves struck $1 trillion — amidst criticism that the country keeps the value of it currency artificially low.
US officials have said that it is in China''s interests to seek better balance in trade in order to manage such huge reserves. Paulson has said that China needs to adopt policies that foster more demand at home instead of relying so heavily on exports.
