WASHINGTON, July 1 (KUNA) -- U.S. Secretary of Treasury Jacob Lew stressed Tuesday that the exchange rate issue with China is a "very big issue from our perspective, saying progress has been made in this regard since 2010.
During a U.S.-China Business Council discussion, Lew indicated that since 2010 the RMB (renminbi) has appreciated 14 percent "but it still needs to appreciate more." He affirmed that China's currency is "undervalued. And that is something that hurts Chinese consumers. It reduces their purchasing power." "One of the things that's so important in terms of China's economy is to increase consumer demand. But it's fundamentally not fair in terms of trading practices, which is why we press on it so hard," he affirmed.
He noted "I think if we can continue to make progress on opening markets and having the exchange rate move towards being a market-determined exchange rate that will be very important to the U.S. economy, to U.S. businesses' ability to compete on a level playing field." He added it is both in the interests of the U.S. and China "to maintain the economic discussions and to keep a strong track as the two leading economies in the world, the two largest economies in the world." Meanwhile, Lew stressed that "always as we engage on economic issues with China in the background are the intellectual property issues because while there is an enormous desire on the part of U.S. firms to invest in China, I think that there is a concern both that U.S. companies and others have that if the intellectual property rules are not followed, that the investment becomes a very short-term benefit, and then there is a loss of trade secrets and other things that are of extraordinarily high value." He said that the Chinese "are focused on this," and that they have "taken a number of enforcement actions." He added "but what we haven't seen is kind of a sustained, continuous effort that just makes it the rules of the road." (end) si.mt
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