China Signal It May Let Currency Rise Could Aid US

MARTIN CRUTSINGER

WASHINGTON (AP) — The dollar edged up in trading against other currencies Thursday as the Chinese government appeared to signal that it may be willing to let the value of its currency rise.

The United States and other countries would benefit from a rise in the value of the Chinese yuan because their exports would become cheaper for Chinese consumers to buy and could help stimulate their economies.

The surprise announcement in a quarterly report from China's central bank came only days before a visit to China by President Barack Obama. If the Chinese did let their currency resume rising against the dollar, it would be a victory for the Obama administration. The administration is under political pressure to do more to battle unemployment in the United States.

U.S. manufacturers contend that the Chinese yuan, which Beijing has effectively pegged to the dollar, is undervalued by up to 40 percent. This makes Chinese goods cheaper for consumers and businesses in the United States to buy. But it makes American products more expensive in China.

U.S. companies argue that this disparity contributes to America's huge trade deficit with China, which hit a record $268 billion last year.