UPDATE 1-China-U.S. talks to "play down" yuan -PBoC adviser

* Playing down yuan will give China more room -PBoC adviser

* Chance of agreement about yuan is remote -researcher

BEIJING, May 20 (BestGrowthStock) – China and the United States will
largely sidestep the yuan at a summit next week because too much
pressure would be counter-productive to getting Beijing to
change its policy, a Chinese central bank adviser said in
comments reported on Thursday.

Li Daokui, an academic adviser to the People’s Bank of
China, also said that the United States seemed less insistent
now about pushing for yuan appreciation because it was aiming
for broader cooperation with Beijing.

“Despite mounting pressure for a stronger yuan in the past
few months, officials from both sides are expected to play down
the currency issue during the meeting, leaving more leeway for
China to decide the fate of its own currency,” Li told the China
Daily.

As one of three academic advisers on the central bank’s
monetary policy committee, Li has little, if any, influence over
policy decisions but has knowledge of high-level thinking.

The United States will continue nudging China at the
Strategic and Economic Dialogue next Monday and Tuesday to let
the yuan appreciate, but trade issues appeared to be higher on
the U.S agenda ahead of the bilateral meetings. [ID:nN19236087]

Treasury Secretary Timothy Geithner and the department’s
senior coordinator for Chinese affairs said on Wednesday they
will urge China to see yuan appreciation as being in its own
interest as well as that of the global economy.

China has held its currency at about 6.83 to the dollar
since mid-2008, trying to buffer its economy from the ravages of
the global financial crisis.

Many analysts and investors had thought that next week’s
summit or a G20 meeting in June were unofficial deadlines for
Beijing to resume yuan appreciation, lest it face punitive
measures from Washington.

But the deepening of sovereign debt worries in Europe
coupled with signs of a stronger U.S. recovery have softened
criticism of China’s yuan policy and cast doubt on whether it is
still under intense pressure to move.

Separately, Lei Yanhua, a researcher at the Ministry of
Commerce, said there was little possibility of the two countries
reaching an agreement about the yuan at their meetings next
week, the International Business Daily reported on Thursday.

Lei argued that yuan appreciation was not key to addressing
the China-U.S. trade imbalance and that any yuan appreciation
made under duress would harm both China and the global economy.
Investment

(Reporting by Simon Rabinovitch and Aileen Wang; Editing by Ken
Wills)

UPDATE 1-China-U.S. talks to “play down” yuan -PBoC adviser