China and US to Have One-on-one Talk
The United States and China will have a Strategic and Economic Dialogue on May 9-10, 2011 in Washington DC, USA.
In the discussion, the two countries are expected to talk about currency and debt issues with the US wanting for China to allow the yuan to appreciate quickly and China being concerned about the looming US budget deficit.
The United States and European Union, China’s major trading partners, are criticizing China for designing its economic strategy through a way of keeping the yuan artificially low to give Chinese manufacturers the advantage of cheaper prices compared to foreign competitors.
People’s Bank of China Chairman Zhou Xiaochuan defended the country’s strategy and explained otherwise that it was not intended by China for such reason but for dealing with inflation in the country as a secondary tool.
Despite the disagreement, the pressure from US and EU succeeded in making the yuan appreciate in the past year, with a currency gain of 5 percent against the US dollar.
The gain was not as much as foreign partners wanted and it was considered by them to be very undervalued compared to their currencies.
China believes that a greater growth in the yuan would be detrimental to their export sector and to their overall economy. Their export sector drove the growth of their economy during the past years and a change in policy in it will have a significant impact on their whole economy.
US Treasury Secretary Timothy Geithner and US Secretary of State Hillary Clinton will represent the US and Chinese Vice Premier Wang Qishan and Chinese State Councilor Dai Bingguo will represent China in the negotitation.