Washington Post Foreign Service
Sunday, June 20, 2010
By Keith B. Richburg and John Pomfret
BEIJING -- Facing growing pressure from around the world, China's central bank announced Saturday that it is prepared to allow the country's currency to float more freely against the dollar and other foreign currencies, potentially raising the cost of Chinese goods.
The statement, from a spokesman for the People's Bank of China, gave no details on when China would allow its currency -- known as the yuan or the renminbi -- to appreciate or by how much. But the timing of its release, just before the leaders of the world's largest economies gather for a G-20 meeting in Toronto, was clearly aimed at taking pressure off Beijing...
...Obama, in a statement, called the announcement "a constructive step that can help safeguard the recovery and contribute to a more balanced global economy." Treasury Secretary Timothy F. Geithner added that "vigorous implementation would make a positive contribution to strong and balanced global growth."
But critics remained skeptical, noting that China has sent signals before about a currency appreciation -- usually ahead of an international meeting or deadline -- and then done nothing. The most recent example came in April, when senior Chinese officials told reporters on the eve of President Hu Jintao's visit to Washington for a nuclear security summit that it was time to allow more flexibility in the currency. Hu attended the summit, and the currency was left unchanged.
"This vague and limited statement of intentions is China's typical response to pressure," said Sen. Charles E. Schumer (D-N.Y.), who has co-authored legislation that would impose tariffs on Chinese goods if the yuan does not appreciate...