WASHINGTON - US Treasury Secretary Timothy Geithner said on Wednesday that the United States cannot force China to change its exchange rate.
"Well, China is a sovereign country. China is going to have to decide its exchange rate. We can't force them to make that change," Geithner said in an interview with the CNN broadcasting network."I think China will be better, they are... stronger as an independent country if they are not running an exchange rate policy that essentially has the Federal Reserve of the United States setting monetary policy in China," Geithner said.
In another interview with the Fox Business network on Wednesday, Geithner said he is not concerned that the US is headed toward a trade war with China."We will work hard to ensure that US companies can compete on a level playing field with China," he said.
Pressure on China to realign its currency has been growing in the United States. A group of US senators last week proposed legislation to press China to appreciate its currency, saying the RMB was undervalued.The bill would require the United States to impose tariffs and other penalties on countries that failed to address the so-called misaligned currencies.
Also on Wednesday, Chinese Vice Commerce Minister Zhong Shan said in a speech at the US Chamber of Commerce that the appreciation of RMB is not "a good recipe" for solving US-China trade deficit.
"We believe in the need for reasonable stability not only on the RMB, but also on the US currency policy," said the Chinese trade official. "A dip in dollar value will undoubtedly bring great repercussions to the global financial system and the world economy," said Zhong. "It is in nobody's interest, China's, the US' or other countries', to see big ups in the RMB or big downs in the dollar."