China and US to hold talks over currency issues

| April 26, 2011 | 0 Comments
China and US to hold talks over currency issues

China and the US are set to hold economic talks in Washington DC next month as the two countries endeavour to reach an agreement over currency issues.

The State Department announced yesterday: “The third meeting of the U.S.-China Strategic and Economic Dialogue (S&ED) will be held in Washington, DC, May 9-10, 2011.”

China has been under pressure to revalue its currency, the yuan. The US has previously expressed dissatisfaction that China is keeping the value of the yuan low to help its exporters at the expense of overseas competitors.

Trade groups have argued that the yuan, also referred to as the renminbi, is kept up to 40% below what its value should be against the US dollar.

Last June, Beijing loosened its currency peg and, while the move was welcomed, the US said the yuan had appreciated just 1.9% against the dollar since that time.

China has previously been accused of being a currency manipulator but Beijing has said keeping the yuan stable is “an important contribution” to global recovery and a sudden change in policy could negatively impact on the country’s export sector.

Although the yuan has gained almost 5% against the dollar in the last 12 months, many still argue that it remains undervalued.

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