Testy Tone Over Yuan Bodes Ill For Obama Visit To Beijing

An early sign of of some of the bickering over trade and exchange rates that will be going on behind closed doors during  U.S. President Barack Obama’s visit to China: At the APEC meeting in Singapore, the two countries couldn’t agree on the wording of the meeting’s communiqué in the part that referred to currencies. The phrase “market oriented exchange rates”, which was in the draft, was cut from the final version. Chinese officials seem to be getting increasingly testy about the pressure being exerted by the U.S. over the yuan. In Beijing today, Liu Mingkang, a banking regulator, took a pop at the Washington by saying that America’s low interest rate were fueling speculation in “overseas assets markets”, i.e. China’s, in a way that threatened global recovery. This follows a couple of references by President Hu Jintao at the APEC meeting that glossed over exchange rates and hit out at “unreasonable” trade restrictions by developed nations, i.e. the U.S. If this sort of tone continues, Obama’s visit won’t have much trouble hitting the low expectations being set for it.

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Filed under China-U.S., Economy, Markets

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