Treasury Secretary Jacob Lew travels to China Sunday to press senior Chinese officials on currency reform, market access and a number of other trade irritants.
The trip, Lew’s third, comes weeks after the Treasury Department told Congress that it didn’t think China is a currency manipulator but needs to take further steps to liberalize the yuan.
Earlier this year, China made it easier for the value of the yuan to rise or fall within a band. It was widely seen as an important step toward a currency whose value relative to other currencies is determined by financial markets like those of most other industrialized nations.
But as China’s economy began slowing, now projected by Western analysts to grow in the range of 7.5 percent, the government seemed to endorse allowing the yuan to lose value, making China’s exports cheaper on international markets and foreign-made products imported into China more expensive.
“There is still substantial adjustment to take place,” a senior Treasury official told reporters Friday, in a briefing that was conducted on the condition that two Treasury officials not be identified in exchange for discussing policy. The official said China’s economic slowdown “doesn’t change the necessity” for currency reforms.
Secretary Lew is also expected to press senior Chinese officials to do more to protect patents and copyrights of U.S. products, and to push for greater access for U.S. products within China.
“There are a whole host of issues that the secretary will want to raise,” said another Treasury official, saying Lew will push next week, and later in the year during Strategic and Economic Dialogue meetings in China, for a relationship that is “more balanced and fair.”
China is projected to overtake the United States soon as the world’s largest economy. It still lags far behind the United States and European allies in per person income, output, innovation and a host of other areas that will continue to distinguish the largest economy from more potent ones.