US Treasury Secretary Timothy Geithner said Thursday that China must allow a "significant, sustained" rise in its currency to help secure "strong, sustainable global growth." Geithner testified before a US Senate panel, whose members called for the US government to take a tougher stance on the yuan, according to dpa. He said that the renminbi's "pace of appreciation has been too slow and the extent of appreciation too limited." "We are examining the important question of what mix of tools - those available to the United States and multilateral approaches - might help encourage the Chinese authorities to move more quickly," Geithner said. His remarks were harsher than previous statements from top official's in President Barack Obama's administration. China continues to keep the value of its currency artificially low to reduce the price of its exports and has not lived up to its promises made in June to allow more exchange-rate flexibility, Geithner told Congress. On Wednesday, the US filed two complaints with the World Trade Organization against China, and US lawmakers introduced measures that would allow the US to pursue sanctions against countries that manipulate their currencies. Designating China as a currency manipulator could lead to sanctions. Washington refused to go that far in a report in June on China's currency. Since then, the renminbi has risen only 1 per cent against the dollar, frustrating Washington officials who have complained that Beijing's policies unfairly put Chinese firms at an advantage on the world market. The IMF has declared China's currency significantly undervalued, but not followed up with action. The International Monetary Fund's primary role is to ensure currency balance, yet the IMF has only intervened in two cases over 30 years, Senator Chris Dodd noted. He questioned whether giving China a greater say in the IMF - an issue to be discussed at upcoming meetings because of China's rising economic influence - will encourage "improved behaviour" by China. "I'm curious as to why we'd even be talking about enhancing their role given the fact that they've been so recalcitrant - and I'm being polite in using that word - when it's come to currency manipulation over the past number of years," Dodd said. China's currency and trade policies have long been a point of tension in US-Sino relations as the United States has seen its trade deficit balloon with what is now its second-largest trading partner. The US trade deficit with China hit 227 billion dollars last year and 119 billion dollars in the first half of this year. China "encourages outsourcing of production and jobs from the United States, and it makes it more difficult for goods and services produced by American workers to compete with Chinese-made goods and services in China, the United States and third countries," Geithner said. "We need a more balanced economic relationship. This is imperative for us, but it is important to China as well." Geithner called on countries with trade surpluses like Japan and Germany to increase domestic demand and rely less on exports.
