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Geithner pushes for stronger yuan to balance growth

By Alan Yonan Jr.

LAST UPDATED: 01:49 a.m. HST, Nov 11, 2011

Treasury Secretary Timothy Geithner Thursday urged China to continue allowing its currency to strengthen, a move that could translate into increased spending by the growing number of Chinese visitors to Hawaii.

Allowing a further appreciation of the Chinese yuan is just one of the steps that the 21 nations attending the Asia Pacific Economic Cooperation meeting can undertake to achieve more "balanced" growth and bolster the global economy as Europe struggles through its debt crisis, Geithner said at a news conference after a meeting with other APEC finance ministers at the Hawai'i Convention Center.

"We are all directly affected by the crisis in Europe, but the economies gathered here are in a better position than most to take steps to strengthen growth in the face of these pressures from Europe," Geithner said.

"That capacity for growth is essential to the prosperity of the United States, and that's why we are committed to continued engagement with the economies of the Pacific Rim, including more open and productive trade relationships," he said.

In addition to pushing for more market-based foreign exchange rate policies, APEC finance ministers pledged to do more to stimulate domestic growth, undertake financial reforms, invest more in infrastructure and expand the reach of safe and reliable financial services for the poor, Geithner said.

His comments were echoed in a joint ministerial statement issued by the finance ministers after their meeting.

Years of foreign exchange manipulation by Chinese authorities have resulted in a situation where the yuan is significantly undervalued in global currency markets. China pursued a weaker yuan policy because it made the country's goods more competitive in world markets and improved the country's growth rate.

In June 2010 China agreed to slightly relax its grip on the yuan and let the currency appreciate modestly. Since then the yuan has gone up about 10 percent after adjusting for inflation, Geithner said.

Still, China can do more, he said. "It is the judgment of most independent economists and analysts that look at China's exchange rate that it is still significantly undervalued," he said.

Geithner said the APEC finance ministers agreed that global growth will be "aided by exchange rate policies in China and other Asian economies that allow their currencies to adjust in response to market forces."

"China in particular, must continue to allow its currency to strengthen, and China has acknowledged the importance of faster exchange rate adjustment," Geithner said.

While allowing the yuan to strengthen is considered an important part of balancing the global economy, such a move also bodes well for Hawaii's visitor industry.

A stronger yuan will give more buying power to Chinese visitors, who are a small but growing segment of Hawaii's tourism market.

Visitor arrivals from China totaled nearly 58,000 through the first nine months of this year, up 27 percent from the same period last year. The number of visitors from China is on track to reach a record 91,662 for the year, according to Hawaii Tourism Authority projections.

And the $360.68 average daily spending by Chinese visitors during the first nine months of this year surpassed even the free-spending Japanese, the HTA said.

Shopping was the No. 1 spending category for Chinese visitors at $185.91 a day per person, followed by lodging at $69.42, the HTA reported.

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HonoluluHawaii wrote:
"And the $360.68 average daily spending by Chinese visitors during the first nine months of this year surpassed even the free-spending Japanese, the HTA said." Did I read that average spending would be about $350 per day, for the higher end APEC participants. Does that mean that Chinese are higher end people? Great. Finally the Asian population of this world is being recognized. LOL. I am Japanese (LOL).
on November 11,2011 | 01:51AM
Highinthesierras wrote:
If the average Chinese citizen could come to Hawaii what would that person spend? By the way, what animal does Geithner bring to mind?
on November 11,2011 | 06:03AM
HonoluluHawaii wrote:
There is that circular halo behind him, and let me see now . . . Well i give up . . . looks like a perfect human being to me . . . I mean I am sure he digs his nose like all of us . . . other than that . . . so what, what is the answer Mr. California Sierra ???
on November 11,2011 | 06:36AM
cojef wrote:
A tax dodger who had not paid his taxes at the time of his nomination to become the US. Treasurer. Or tax evader is more appropriate.
on November 11,2011 | 07:10AM
cojef wrote:
Correction Secretary of the Treasury, not US Treasurer
on November 11,2011 | 07:13AM
HonoluluHawaii wrote:
Correction? Oh i thought u mean Jail.
on November 11,2011 | 09:05AM
wiliki wrote:
Actually House Speaker Boehner call Geitner a "punk staffer" to reassure the financial community that the Republicans would block financial reforms that Wall Street opposed after the Great Recession caused by Bush inattention of Wall Street excess. Had most of the House and Senate staffers wearing "punk staffer" buttons....
on November 11,2011 | 09:17AM
JPM wrote:
With that hair and past history I’m going with a weasel. Did I get it?
on November 11,2011 | 07:40AM
JPM wrote:
With that hair and past history I’m going with a weasel. Did I get it?
on November 11,2011 | 07:40AM
Highinthesierras wrote:
OK, the answer is mole. Read the book by a Pulitzer Prize winning NY Times reporter, The Confidence Men, and you will find that the Secratary was at the heart of the financial meltdown, and was pushed on the President by Wall Street. The author concludes that the President was not prepared for the challenges of the office, and cites the appointment of Geithner as evidence.
on November 11,2011 | 09:39AM
Changalang wrote:
Cowardly lion; who carries no sway to get the yuan properly valued. What a joke.
on November 11,2011 | 06:12PM
Kuniarr wrote:
Indeed a stronger Yuan would decrease our trade deficit with China. US trade deficit may be the source of the economic mess that the US is now in.
on November 11,2011 | 05:39AM
wiliki wrote:
Nope US innovation and competitiveness seems to be declining because of the continued drop in research funding. Republicans want to cut it all.
on November 11,2011 | 09:19AM
wiliki wrote:
Just testing. Doesn't seem to be working again.... Can't post.
on November 11,2011 | 09:25AM
honujoy wrote:
Is it just me (?), but I just can't respect/take this guy seriously and absolutely can't stand being lectured by "Mr. Tax-Cheat-IRS-Boss-in-Chief" about anything concerning the economy, when he himself "forgot to pay his taxes", but practically had to force himself to pay back-taxes in order to get his cushy White House job in the first place! Anyone else e.g. we "mortals" would have been hounded by the Feds/IRS agents with audits for the rest of lives, not to mention being thrown in jail!
on November 11,2011 | 07:30AM
Anonymous wrote:
Comment has been sent for approval
on November 11,2011 | 07:31AM
OldDiver wrote:
Hey Timmy, how about re-regulating the Wall Street Banksters. Let's fix our own problems first before we look for others to help us. Stop protecting your friends at Goldman Sachs and do the right thing.
on November 11,2011 | 08:28AM
wiliki wrote:
Quite true the reforms haven't gone far enough. Recently there a smaller banking company in the news that failed. It was small enough to fail and it did (current laws only cover the biggies or those too big to fail). It's a good reminder that Congress still needs tighter regulation of the industry. Investors and depositors lost about $500 Million in that bankruptcy.
on November 11,2011 | 09:23AM
wiliki wrote:
IIRC it's the same one that the CEO, Governor Corsine (not sure of the spelling) refused unprecedentedly, a golden parachute of something like $10M when he resigned.
on November 11,2011 | 09:30AM
Anonymous wrote:
Problems on the system today? Trying again. The Chines have a lot of respect for Geitner. They have gone along with increasing the "volatility" of the yuan while limiting it's rise in the average. The 10% mentioned in this article is huge for the increase in the yuan. You wonder how much social unrest in China such inflation is causing. I had thought that it was much much lower-- like about 2 to 4%.
on November 11,2011 | 09:13AM
wiliki wrote:
Why is this? I'm not "Anonymous"....
on November 11,2011 | 09:32AM
HD36 wrote:
When the Chinese allow their currency to float, it will appreciate by at least 40% against the US dollar. The Chinese will have their purchasing power instantly go up thus causing all commodites to rise, including imports. Buy your big screen now!
on November 11,2011 | 01:55PM
Changalang wrote:
Tiny Tim is a joke amongst global bankster thieves, and so is APEC. We don't need APEC to build Chinese tourism. They are going to come here and keep spending more dollars because our tool of Secretary keeps devaluing U.S. currency. Luckily we get plastic stuff that breaks in two weeks to become immortal in our small landfill. China laughs at us, and rightly so.
on November 11,2011 | 06:08PM
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