Chinese president bats away yuan criticism

By Aaron Smith, staff writer


NEW YORK (CNNMoney) -- Chinese President Hu Jintao, on the eve of his U.S. visit, has called the dollar-dominated international currency system a "product of the past" and said the yuan will emerge as a global currency.

In written responses to questions from the Wall Street Journal and Washington Post published Monday, Hu also said he wants to strengthen ties with the United States.

"We both stand to gain from a sound China-U.S. relationship, and lose from confrontation," said Hu, in written responses to questions from the two newspapers.

Hu is scheduled to visit the White House on Wednesday to discuss international trade, currency and other issues. The upcoming meeting has put the spotlight on criticism that the government-controlled People's Bank of China artificially undervalues the yuan, bringing down the cost of Chinese exports and giving it an advantage in the international market.

But Hu dismissed the criticism.

"The current international currency system is the product of the past," Hu said, in his response to the publications.

On Jan. 12, Treasury Secretary Timothy Geithner said China must do more to address its undervalued currency and dependence on exports, adding that such a move is in Beijing's best interest because it will control inflation.

But Hu dismissed the argument that price stability is a reason for yuan appreciation, telling the publications that Chinese inflation is "moderate and controllable."

The Chinese president has complaints of his own, particularly with Federal Reserve policy aimed at stimulating the economy. The policies particularly affect China, given that it holds billions of dollars in government debt.

Hu told the publications that U.S. monetary policy "has a major impact on global liquidity and capital flows and therefore, the liquidity of the U.S. dollar should be kept at a reasonable and stable level."

Hu also renewed a promise to make sure that U.S. companies in China are treated fairly.

"All foreign companies registered in China are Chinese enterprises," he said, according to reports. "Their innovation, production and business operations in China enjoy the same treatment as Chinese enterprises."

In an apparent attempt to smooth relations ahead of the meeting, the Bank of China on Jan. 12 began providing the yuan directly to U.S. traders for the first time. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Overnight Avg Rate Latest Change Last Week
30 yr fixed3.99%4.00%
15 yr fixed3.06%3.10%
5/1 ARM3.20%3.19%
30 yr refi3.99%4.08%
15 yr refi3.07%3.18%
Rate data provided
by Bankrate.com
View rates in your area
 
Find personalized rates:
Index Last Change % Change
Dow 17,827.75 12.81 0.07%
Nasdaq 4,787.32 29.07 0.61%
S&P 500 2,072.83 5.80 0.28%
Treasuries 2.23 -0.03 -1.15%
Data as of 7:18am ET
Company Price Change % Change
Kinder Morgan Inc 42.32 0.00 0.00%
Apple Inc 119.00 0.00 0.00%
Pfizer Inc 31.10 0.00 0.00%
Bank of America Corp... 17.11 0.00 0.00%
Microsoft Corp 47.75 0.00 0.00%
Data as of Nov 26

Sections

The European Parliament has voted to break up Google and weaken its dominance across the region. More

Two pilots encountered drones while flying over college football games and another pilot saw one while flying over the Hollywood sign. More

Natalie's Cakes and More has raised $84,000 through GoFundMe after protests trash store. More

Retailers are promising big deals this Black Friday, but are the savings actually worth the shopping mayhem? Test your deal-sniffing skills. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.