POSTED: 01:30 a.m. HST, Nov 11, 2011
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.