UPDATE 1-Europe’s woes to have small global impact-US official

* US says Europe taking needed steps to counter crisis

* China policy of boosting consumption needs to be
reinforced

* US highlights June G20 as important forum for cooperation
(Adds details, background)

By Glenn Somerville

BEIJING, May 23 (BestGrowthStock) – Europe’s financial crisis should
have only minimal impact on the global recovery as governments
put in place necessary policy counter-measures, a senior U.S.
Treasury Department official said Sunday.

The U.S. official spoke to reporters in Beijing on
condition of anonymity ahead of two days of high-level talks
with Chinese officials where Europe’s financial woes are
expected to be discussed, if only to highlight the need for
continued efforts to rebalance global growth.

There has been speculation that China may delay letting its
yuan currency rise in value — as Washington has urged — out
of concern that its exports to Europe will suffer.

The U.S. official repeated that it was China’s choice to
decide what to do about its currency peg but expressed hope
that Beijing would keep boosting domestic consumption and rely
less on exports for growth.

U.S. Treasury Secretary Timothy Geithner and Secretary of
State Hillary Clinton are leading a delegation of nearly 200
U.S. officials in the Strategic and Economic Dialogue that
opens on Monday.

When it wraps up on Tuesday, Geithner heads for Britain and
Germany for talks with officials in London, Frankfurt and
Berlin about efforts to stabilise turbulent markets that have
led investors to flee and driven the euro’s value down.

The U.S. Treasury official offered praise for Europe’s
commitment to battle the crisis by agreeing on a $1 trillion
safety net and expressed confidence that policymakers will be
able to manage the risks to the region’s economy.

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The Beijing talks will cover a wide range of economic
issues, with a greater emphasis by the U.S. side on resolving
trade irritants than on its longstanding bid to get China to
let the yuan’s value be more influenced by market forces.

Beijing has kept the yuan pegged to the dollar since
mid-2008, partly to keep its growth stable in the wake of the
financial crisis that struck the United States at that time.

The U.S. official noted that China’s growth was increasingly
being fuelled by more consumer spending at home, rather than
reliance on exports, and said Washington wants to see that
trend continue and be reinforced.

A higher-valued yuan generally would make U.S. imports
cheaper for Chinese buyers and have the effect of sustaining
more consumption within China.

The U.S. Treasury delayed issuing a report due at mid-April
on trade practices of key partners that potentially could have
labelled China a currency manipulator.

The U.S. official noted that the Treasury said at the time
it pointed to the importance of the meeting of Group of 20
political leaders that takes place in Canada in late June.

The G20 is an important forum for demonstrating member
countries’ ability to cooperate on key issues, the official
added.

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(Reporting by Glenn Somerville; Editing by Jeremy Laurence)

UPDATE 1-Europe’s woes to have small global impact-US official