WASHINGTON - Treasury Secretary Timothy Geithner said China's exchange-rate policy is an impediment to a more balanced global recovery and allowing the yuan to strengthen would benefit Chinese consumers.
"The distortions caused by China's exchange rate spread far beyond China's borders and are an impediment to the global rebalancing we need," Geithner said in prepared testimony before the Senate Finance Committee Thursday. A more flexible yuan would allow China to pursue "a more effective, independent monetary policy, which is particularly important now, with China's economy facing a risk of inflation in goods and in asset prices."
The United States has been trying to pressure China to allow its currency to strengthen. China has kept the yuan pegged to the dollar as a crisis-fighting policy, fueling complaints from trading partners and U.S. lawmakers that the world's biggest exporting nation has an unfair advantage in global commerce.
A report released earlier Thursday in Beijing showed that China's exports jumped the most in six years and property prices rose at a near-record pace, signs that the world's third-largest economy is withstanding the sovereign-debt crisis in Europe.
Exports gained 48.5 percent in May from a year earlier, China's customs bureau said. Real-estate prices rose 12.4 percent across 70 cities, the statistics bureau said separately.
The U.S. Commerce Department, in its monthly report on the country's trade balance, said today that U.S.-China trade totaled $126.5 billion in the first four months of the year, up 19 percent from January through April last year. U.S. imports of Chinese goods exceeded exports to China by $71 billion, a 5.7 percent increase in the bilateral trade gap from the year-earlier period, the report showed.
'A level playing field'
"We want China to provide a level playing field for the products of American workers and investments by American companies," Geithner said. "And we want China to change its growth strategy to rely less on exports and more on consumption."
