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. Last Updated: 07/27/2016

U.S. Presses China on Currency Control

BEIJING -- The U.S. treasury secretary said Wednesday that Chinese leaders indicated they would move toward letting their currency trade freely on world markets, but he came away with no timetable for ending exchange-rate controls.

But the Chinese premier, later in the day, said a stable exchange rate for the yuan "benefits both China and the United States."

John Snow was on the second day of a two-day visit to Beijing to press Washington's case for loosening controls on the yuan. Many abroad say its government-set value against the dollar and other currencies is too low and is a protectionist attempt to keep down the prices of Chinese exports.

Snow said Chinese leaders are easing controls on the movement of money and taking other steps to prepare their financial industry and economy for a free-floating exchange rate.

"The objective here is to get China to move toward a free-floating currency," said Snow, who met with the Chinese finance minister and central bank governor. "I was encouraged to see Chinese leaders reaffirm that goal."

Asked when Beijing would be ready, Snow said: "I don't think it's helpful for us to talk about a timetable."

The outcome of Snow's visit was likely to disappoint U.S. and other companies that say an undervalued yuan is hurting producers who try to compete with China and wiping out jobs abroad.

Despite its huge flow of exports, China is the largest economy whose currency isn't traded on world markets.

The yuan -- also known as renminbi, or "people's money" -- has been fixed at about 8.28 to the U.S. dollar since 1994. It is allowed to fluctuate, but only in tiny increments -- a fraction of 1 percent -- and in closely regulated trading by those who have cleared official hurdles.

Last month, the U.S. National Association of Manufacturers said that official rate was 40 percent too low and gave Chinese exporters an unfair advantage.

Chinese officials have given no time frame for letting the yuan trade freely, but have been easing controls on the movement of foreign currency in an attempt to help businesses and reduce foreign pressure for a stronger yuan.