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US, China to hold economy meeting in May

April 26, 2011


WASHINGTON — Top officials from the United States and China will meet in Washington early next month, the Treasury Department said Monday, as tensions between the two economic superpowers simmer.

Treasury Secretary Timothy Geithner and Secretary of State Hillary Clinton will host Chinese Vice Premier Wang Qishan and State Councilor Dai Bingguo, amid continued tensions over debt, exports and the value of China’s currency.

The Treasury Department has delayed the publication of a report that could lead to sanctions against Beijing until after the meeting, despite US lawmakers complaining that China is still manipulating its currency for trade advantage.

The semi-annual report, which was due on April 15, has become a focal point for critics who accuse Beijing of unfairly keeping the yuan weak against the dollar to boost Chinese exports.

The US government said it would wait until a meeting of the Group of 20 finance chiefs, the IMF’s annual spring meetings and the bilateral meeting on May 9 and 10 before publishing the document.

The yuan has strengthened almost five percent against the dollar in the last year, amid fierce political pressure from Washington. But experts say it still remains undervalued.

With China the largest foreign holder of US bonds, the two sides are also likely to discuss the outlook for US debt.

China urged the United States last Tuesday to adopt “responsible measures” after ratings agency Standard & Poor’s cut the outlook on US sovereign debt to negative.

S&P sent stocks plunging worldwide when it slashed its outlook from “stable” to “negative” Monday, pointing to doubts about Washington’s ability to tackle looming debt and fiscal deficits — concerns raised by Beijing in the past.

“US Treasury bonds are a reflection of US government credit and are important investment products for domestic and international institutional investors,” foreign ministry spokesman Hong Lei said in a statement.

“We hope the US government will earnestly adopt responsible policy measures to guarantee the interests of investors,” he added.

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