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October 18, 2005
Snow adopts softer stance on yuan issue
American manufacturers won't be happy, but I think it's the right thing to do. I've been saying for a long time that we should back off on the revaluation talk.
Read the whole story from the NY Times:
BEIJING, Oct. 17 - For two years, Treasury Secretary John W. Snow has pushed and prodded China to let its currency float more freely. On Monday, he declared his satisfaction and changed the subject.
After a week of meetings from Shanghai to Beijing, Mr. Snow buried his specific demands for the yuan beneath a broader call for China to overhaul its system of banking and investment.
The stance sounded bolder and more ambitious, a demand for China to clean up its banks, build a sophisticated market for trading currencies and let Wall Street firms become full-fledged players in the stock market.
But the new call was also a retreat. By closely linking the narrow issue of the currency to long-term goals of "financial modernization," Mr. Snow implicitly gave Chinese leaders years to adopt anything close to a floating exchange rate.
"We are here to encourage the progress, to support the progress," he said on Monday. "Moving toward a truly flexible exchange rate regime requires quite a large number of steps," he added. "We recognize that will take some time."
Posted by William Polley at October 18, 2005 12:39 AM
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