Treasury Secretary Timothy Geithner on Thursday said he shared U.S. lawmakers' concern about China's currency value, but was optimistic Beijing would begin letting the currency appreciate.
"I think it's actually quite likely (China) will move. I think they recognize it's important to them, in their interest as well," Geithner told the Senate Budget Committee.
"And it's an important part of what we're trying to do generally to try to make sure that the world is growing. That it's growing not on the basis of an investment-led, export-heavy model again. That it's growing with stronger consumption, stronger domestic demand," Geithner said in response to a question from Senator Ben Cardin.
"And that requires a level playing field for American exporters generally and we're going to work very hard to encourage those changes. And I share your view about the importance of seeing more progress across the board in this area," Geithner added.
The exchange came one day after President Barack Obama vowed to "get much tougher" with China on trade and currency rules, prompting Beijing to reply the value of its yuan was already at a reasonable level and it did not deliberately pursue a trade surplus with the United States.
But Cardin, reflecting the view of many lawmakers, said China's currency is significantly undervalued, putting U.S. exporters at an unfair competitive disadvantage.
"I'm certainly sympathetic to allowing (Beijing) a transition time so we don't cause a major disruption in markets," the Maryland Democrat said.
"But if we don't be more aggressive on this, if we solely depend upon the Chinese to decide when they're going to allow their market to fluctuate, I think we're doing a disservice to U.S. manufacturers and producers," Cardin said.
It will also be "extremely difficult" for the United States to meet Obama's goal of doubling exports by 2014 if China does not allow its currency to appreciate, Cardin added.
© 2017 Thomson/Reuters. All rights reserved.