Snow Urges Chinese Government To Act On Yuan, Market Liberalisation

by Mary Swire, for LawAndTax-News.com, Hong Kong

14 October 2005

Speaking during a visit to Shanghai this week, US Treasury Secretary John Snow praised the Chinese government for its decision earlier this year to abandon the longstanding yuan-dollar peg, but urged action on increasing liberalisation of the country's financial markets and the boosting of domestic demand.

Despite calls in Congress for legislative action to impose tariffs on the Chinese authorities if they fail to take steps to increase the value of their currency, Mr Snow stressed that the Bush administration is prepared to be patient on this issue.

However, he urged reform of the financial markets by allowing more foreign securities firms into the country, and increasing the range of products that can be offered.

"It's clear that the financial markets...have the potential to play a much more important role in the Chinese economy," he explained, according to the Wall Street Journal.

The US Treasury Secretary also called on the Chinese government to introduce measures to spur domestic demand, thus reducing the economy's reliance on exports.

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