Treasury Secretary Jack Lew called on China to “embrace responsibility” in international economic affairs on Tuesday, raising concerns about the Chinese government’s management of its currency on the day when President Xi Jinping is set to arrive in the U.S.
In an op-ed published by the Wall Street Journal, Lew challeneged Chinese officials to “demonstrate their intent to allow the yuan to be subject to upward pressure that would drive the currency up, not just down.”
The article is the latest in a series of admonitions Lew has issued to China’s government in the wake of its devaluation of its currency this summer, which Lew noted has led to a 3 percent drop against the dollar.
Those warnings have stopped far short of retaliatory action by the U.S. that could prompt a trade war. Lew’s op-ed, however, is a sign that concerns about currency manipulation will be in the foreground as Xi visits the U.S. and talks with top officials.
Currency talks are just one of the sensitive subjects on the agenda for Xi’s visit. In recent weeks pressure has grown on the Obama administration to respond to alleged Chinese cyberattacks on the U.S. and Chinese aggression in the South China Sea.
In a separate interview with the Wall Street Journal, Xi defended his government’s currency intervention on the grounds that it was necessary to contain a systemic threat to the economy, quipping that “[a]ny ship, however large, may occasionally get unstable sailing on the high sea.”
In his op-ed, however, Lew claimed that China’s management of its currency and its efforts to prop up stock markets amid a massive rout have “raised doubts about the commitment of the country’s leaders to allow market forces to play a “decisive role” in allocating resources.”
Xi is scheduled to arrive on the West Coast Tuesday before traveling to Washington and New York later in the week.
