Report: China Close To Revising Currency

New York Times said revision will allow greater variation in value of Chinese yuan, combined with 'small but immediate jump' in its value against the dollar.

BEIJING (Kyodo) -- China is "very close" to announcing a revision of its currency policy in the "coming days," The New York Times reported in a dispatch from Hong Kong on Thursday.

Quoting sources with knowledge of the consensus emerging in Beijing over the value of the Chinese currency, the paper said the revision will allow greater variation in the value of the Chinese yuan, combined with a "small but immediate jump" in its value against the dollar.

According to the sources, the report said that short of a "last-minute glitch" that might delay an announcement, China's central bank appears to have prevailed with its arguments within the Chinese leadership for a stronger but more flexible currency.

The New York Times said the model for the upcoming shift will be based on China's move in 2005, when the Chinese leadership allowed the yuan to jump 2 percent overnight against the dollar and after that trade in a wider daily range.

The emerging consensus comes as U.S. Treasury Secretary Timothy Geithner met with senior Hong Kong officials Thursday before flying to mainland China for discussions with Chinese Vice Premier Wang Qishan, who is responsible for economic affairs.

The Chinese Foreign Ministry at a regular press briefing on Thursday did not give details of the meeting between Geithner and Wang other than to say both sides will "exchange ideas" related to the upcoming China-U.S. Strategic and Economic Dialogue and on "issues of mutual concern."

The two were expected to meet in the early evening, Beijing time.

China has faced pressure from the United States in past months to appreciate the yuan in order to balance the U.S. trade deficit with Beijing.

Geithner said over the weekend the United States will conduct currency diplomacy with China at venues such as a meeting of finance ministers and central bank governors of the Group of 20 major economies later this month in Washington.

U.S. manufacturers say the yuan is undervalued by as much as 40 percent to give Chinese products an unfair trade advantage, and U.S. lawmakers are threatening to slap duties on Chinese imports unless Beijing raises the value of the currency, also known as the renminbi.

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