May 4, 2012 / 10:20 AM / 7 years ago

China made significant, promising FX reform: Geithner

Different values of China's yuan banknotes are placed on a window sill as Shanghai's skyscrapers are seen in the background, in this photo illustration taken in Shanghai April 15, 2012. REUTERS/Petar Kujundzic

BEIJING (Reuters) - China has made significant and promising reforms to its currency regime that will lead to further appreciation of the yuan against the dollar and other major currencies over time, U.S. Treasury Secretary Timothy Geithner said on Friday.

Geithner, making a closing statement at the end of the annual Strategic and Economic Dialogue between the United States and China in Beijing, offered further encouragement to Chinese authorities in their efforts to liberalize the country’s tightly controlled capital account and financial markets.

“China has acted to move toward a more flexible exchange rate system in which the market plays a greater role. It is intervening less in exchange markets. China is also moving to liberalize controls on the international use of its currency and on capital movements into and out of the country,” Geithner said.

The prepared remarks run counter to the Capitol Hill rhetoric of Washington’s many critics of China and a currency regime they say is managed deliberately to give companies in the world’s second biggest economy an unfair advantage in global trade.

“These steps are significant and promising and, we believe, will lead to further appreciation in the exchange rate over time against the dollar and the other major currencies,” Geithner added.

Reporting by Rachelle Younglai; Writing by Nick Edwards; Editing by Sanjeev Miglani

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