U.S. To Keep Pressing China On Currency

By Agence France-Presse The White House pledged Sept. 3 to keep pressure on China to drop its controversial currency peg despite a lack of progress on the matter during high-level talks in Beijing. "We continue to emphasize and believe that the best system is one based on free trade, free capital flows and market-determined floating exchange rates," said Scott McClellan, chief spokesman for U.S. President George W. Bush. The Chinese yuan has been pegged to the dollar for nine years and has plummeted in recent months in sync with the U.S. currency, giving Chinese exporters an unfair advantage, according to critics. McClellan's comments came after China refused to budge on the issue, telling visiting U.S. Treasury Chief John Snow in Beijing it was in both countries' interest to keep a stable exchange rate. While Chinese officials told Snow a flexible yuan was the ultimate objective, neither side was ready to talk about when it might happen. "Just in and of itself, that we're bringing this issue up and that we're raising the issue . . . that's progress," said McClellan. "It was a good first step, and we will continue to encourage the Chinese authorities to move toward freer trade and capital flows in a market-determined exchange rate." Copyright Agence France-Presse, 2003