WASHINGTON — China needs to move its tightly managed currency, the yuan, to a more flexible exchange rate to help strengthen and sustain the global economic recovery, Treasury Secretary Timothy Geithner said Monday, launching the economic track of two-day U.S.-China talks.
Geithner told China’s Vice Premier Wang Qishan and about two dozen high- level U.S. and Chinese officials assembled in the Treasury’s opulent Cash room that Beijing needed more open capital markets and that its currency’s value needed to be market-determined.
Officials are gathered in Washington for the third round of the U.S.-China Strategic and Economic Dialogue. Besides discussing the yuan, trade and other economic issues, state officials will address sensitive strategic concerns such as human rights, North Korea’s nuclear aspirations and Iran sanctions.
Geithner said his primary goal in the talks is to bolster a fragile global recovery.
“In China … the challenge is to lay the foundation for a new growth model driven by domestic demand, a flexible exchange rate that moves in response to market forces, with a more open market- based economy and a more developed, diversified, sophisticated financial system,” Geithner said at the opening of the dialogue.
The U.S., meanwhile, is battling with unemployment that is still very high and restructuring its own financial system, he said.
“The reforms we must both pursue to meet these very different challenges are not in conflict, and the strengths of our economies are still largely complementary,” he added, stressing the need for the world’s two biggest economies to work cooperatively.
