Persuading Beijing to let its yuan currency rise in value is not simply an issue for the United States but one that should interest the whole world, Treasury Secretary Timothy Geithner said on Wednesday.
When they began this process before, what they did is they began a process of gradual appreciation of currency over time. That's a sensible way to manage it, Geithner said on CNBC television.
I think it's in our interest, and China's interest, and the world's interest that they do that, he said ahead of next Monday and Tuesday's meeting in Beijing of the annual Strategic and Economic Dialogue.
Geithner and Secretary of State Hillary Clinton are leading a U.S. delegation that will meet top Chinese officials for talks on issues ranging from trade barriers to currency, and strategic matters, such as how to deal with Iran's nuclear ambitions.
Recent declines in value of the euro as Europe was putting in place a rescue package for Greece has clouded questions about when China might let its currency rise, since Chinese exporters are feeling the effect of lower European orders.
Geithner wouldn't speculate about timing.
I don't know when they're going to move, he said. But I think it's very much in their interest for them to move.
He said it was important to keep moving on the 750-billion-euro package of loans -- from the European Union and International Monetary Fund -- to prevent the European debt crisis from spreading.
Absolutely Europe has the capacity to manage through this. We just want to see them follow through, he said.
He commented only briefly on Germany's solo action to ban some so-called naked short-selling -- in which traders sell a security without first borrowing it -- and suggested it would be more worthwhile to work on structural reforms to create more market stability.
The history of these things is not good, he said, without specifically mentioning Germany's actions.
On the domestic side, Geithner said that as soon as a broad financial regulatory overhaul bill clears Congress, the Obama administration intends to move quickly to propose reforms for the operation of mortgage finance giants Fannie Mae and Freddie Mac.
The two firms are now in government conservatorship, put there during the heart of the 2008 financial crisis, but still are key suppliers of financing for the housing sector.
We've been working for months, looking at alternatives, and we're going to move very quickly to put those reforms in place, Geithner said, adding he thought there will be broad support from both Republicans and Democrats for legislation needed to enact change.
(1 euro = $1.2345)
(Reporting by David Lawder and Glenn Somerville; Editing by Neil Stempleman)