BEIJING - US Treasury Secretary Henry
Paulson's ongoing China visit has stirred much
debate about a possible appreciation of the yuan.
But instead of pushing hard for the
revaluation of the Chinese currency, Paulson, a
former Goldman Sachs chief executive officer and
an expert on Chinese business issues, may focus
more on the practicalities of financial reform and
trade during his visit, experts said.
"Paulson has a solid understanding of
China," said Zhu Jianfang, a senior macroeconomic
analyst at China Securities Research Co
Ltd.
"He is more practical and should be able to find
more common ground with the Chinese officials."
Having visited China about 70 times in the
past seven years during his time at Goldman Sachs,
Paulson took the position as treasury secretary in
the administration of President George W Bush at
the end of May. He began his first official visit
to China in this capacity on Tuesday.
Paulson's first stop was Hangzhou, capital
of eastern China's Zhejiang province, where he met
with local officials and entrepreneurs. He will
stay in China until Friday.
Paulson
arrived in Beijing on Wednesday and was to meet Ma
Kai, minister of the National Development and
Reform Commission, followed by Vice Premier Wu Yi
later in the day. Paulson and Wu were to hold a
joint press briefing in the evening.
During his visit Paulson will also meet
President Hu Jintao and other high-ranking Chinese
officials in the areas of finance, commerce and
the information industry.
Paulson met with
Zhou Xiaochuan, governor of China's central bank,
at the annual meeting of the International
Monetary Fund in Singapore this week.
"The
[yuan] issue will remain one of the major
interests for US officials like Paulson and should
be discussed with the Chinese side during the
visit," said Wang Yuanhong, an economist at the
State Information Center.
However, neither
side is in a hurry to reshuffle the exchange-rate
scheme. And it should be obvious to Paulson, given
his understanding of China, that a drastic
appreciation of the yuan will not resolve China's
trade surplus with the United States, Wang said.
Before he left for China, Paulson said in
Singapore on Monday that moving toward a freely
traded currency is in China's interests. But, "I
am not looking for immediate solutions or quick
fixes ... I am looking to set a tone and an
expectation of working through issues and making
progress," he told reporters.
Zhou
Xiaochuan also made it clear in Singapore that
China is gradually moving toward a flexible
exchange-rate regime.
The yuan reached its
strongest level against the US dollar on Tuesday
since China appreciated the currency by 2% in July
2005 and linked it to a basket of foreign
currencies instead of to the US dollar alone. The
central bank set the daily reference rate for the
yuan at 7.9342 when traded against the dollar on
Tuesday, compared with 8.11 upon last year's
revaluation.
