China's Trouble: Lots of Dollars, Little Sense

Seeks investments to adjust yuan growth; US official set for talks

(NEWSER) - China, increasingly being called upon to more rapidly adjust the growth of the yuan against the dollar, is looking to expand its investment in US assets as a way to funnel its powerhouse currency out of the country, Bloomberg reports today. Treasury Secretary Henry Paulson visits Beijing Wednesday for a third round of strategic trade talks, and will push yuan appreciation as a consumer price control measure. More»

Leaders also discuss North Korea

(NEWSER) - Japanese Prime Minister Yoshihiko Noda met with Chinese President Hu Jintao in Beijing today, and emerged with a number of deals—including one that will marginalize the US dollar in Asia. The countries agreed to promote direct yuan-yen trades, the Wall Street Journal reports; until now, the money has usually been converted to dollars first. Japan will also hold yuan in its typically dollar-dominated foreign-exchange reserves. More»

Provides written answers to cherry-picked questions

(NEWSER) - Chinese President Hu Jintao is speaking to the American media—albeit through written answers to questions he selected from lists submitted to him by the Washington Post and the Wall Street Journal —for the first time since 2008. Among the topics? "Common ground," the dollar, and the yuan. Hu, who will be in Washington this week for a state visit, said China and the US could both gain by finding "common ground" on issues like fighting terrorism, clean energy, and nuclear proliferation—and only "stand to ... lose from confrontation." Other highlights: More»

(NEWSER) - China is speeding up efforts to encourage the use of its currency in international trading, with analysts predicting that the Chinese renminbi will become one of the three top currencies by 2012, reports the Times of London. In recent months Beijing has inked currency-swap deals with central banks from Korea to Argentina and expanded the currency's use in financial powerhouse Hong Kong. It's a major change for China, which holds trillions in US currency. More»

Despite currency's growth, US criticism of Beijing endures

(NEWSER) - Despite the yuan's continued appreciation against the dollar this year, at nearly 7%—double its growth in 2006—critics say the currency needs to adjust even higher to balance China's trade surplus, reports the Wall Street Journal. In the US, China’s economic strength has become a standard concern on the presidential campaign trail as candidates decry Bejiing’s currency manipulation. More»