Treasury Secretary Timothy Geithner told lawmakers Thursday China is making progress in addressing U.S. concerns over the glaring trade imbalance between the countries, but much works remains to be done to promote a level playing field between the nations.
"Reform of China's exchange rate is critically important to the United States and to the global economy," Geithner read from prepared testimony before the Senate Finance Committee. "And it is in China's own interest to allow the exchange rate to reflect market forces."
Geithner added that Chinese President Hu stated in public this month that China is committed to the reform of the exchange rate, and stated that reform is a key part of China's strategy to produce more balanced growth.
Europe is China's largest export market, Geithner said, noting that 45% of China's currency appreciation on a trade-weighted basis over the last two years has occurred in the last seven weeks, due primarily to the sharp appreciation of the U.S. dollar against the euro in May.
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