In a sign Washington will not press China too hard for more rapid appreciation of the yuan, Treasury Secretary Timothy Geithner said on Friday the Chinese currency had already seen a substantial real rise.
Because Chinese inflation is accelerating more rapidly than U.S. inflation, the right measure of the pace of appreciation is now more than 10 percent a year, and that is a very substantial, material change, Geithner told reporters.
Chinese President Hu Jintao will meet U.S. President Barack Obama at the White House on January 19.
Washington wants the Chinese to allow the yuan to rise at a faster pace. But Geithner's remarks effectively give Beijing a pass on the currency, reducing the possibility of China being named as 'currency manipulator' in long-delayed semi-annual currency report to Congress that was due October 15.
The exchange rate has moved up a little over 3 percent ... against the dollar since June of last year. That is an annual rate of about 6 percent, maybe 7, 8 percent a year, Geithner told reporters at the White House.
But that is not the best measure of competitiveness ... (which) is the combined effect of that change and the difference between China's inflation rate and ours, he said.