Geithner Calls on China to “Reform its Financial System”

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The U.S. Treasury Secretary Timothy Geithner today reiterated the need for China to “reform its financial system” as an element “key” to remove distortions and competitive advantages of the economy of Beijing against the United States.

“Financial reform in China will help reduce one of the main advantages of Chinese companies controlled by the state to compete with U.S. companies,” Geithner said in a conference at the Commonwealth Club of San Francisco.

However, the U.S. Treasury secretary acknowledged the “significant progress” made ​​by China in the past three years, including citing the improved protection of property rights and the relative exchange rate appreciation.

On 14 April, Chinese authorities announced that they increased the yuan’s floating band of 0.5% to 1% for the first time since 2007.

“The process of correcting the exchange rate gap is still incomplete, and China’s currency needs to appreciate more against the dollar and other currencies of reference,” he said.

These are some of the points discussed in his trip to Beijing next week during a new round of meetings within the Strategic and Economic Dialogue between the U.S. and China.

Geithner also asked for a more open China’s economy, eliminate tariffs on U.S. products and to support a decline of China’s trade surplus.

The areas in which the U.S. believes that Beijing has leeway figure rising interest rates through financial rules more flexible.

“These reforms are critical to the continued growth of China,” said Geithner.

Category: Business News