U.S. Treasury Secretary Jacob Lew said Tuesday that China should allow the yuan to rise further and the United States will continue to push China to open its market to U.S. investors on a level playing field.
Lew said the yuan has made some progress and appreciated for 14 percent since 2010, but it is still undervalued. He told audiences of a meeting sponsored by the U.S.-China Business Council that the U.S. government will push China to appreciate the currency at the sixth annual bilateral Strategic and Economic Dialogue (S&ED) slated for July 9-10.
Since China liberalized its exchange rate regime, the yuan has gained by at least 30 percent against the U.S. dollar, and many U. S. economists viewed the yuan's value as appropriate.
Lew said the Bilateral Investment Treaty (BIT) will also be high on the S&ED agenda, but he did expect any quick results from the long-haul talk.
"I think it's not realistic to think there is going to be a concluded BIT in a couple of weeks," Lew said, adding it is a very long process and the U.S. government will continue to encourage China to open markets especially in the finance and service sectors.
Rounds of negotiations have been held after the two countries agreed to re-start the BIT talk at last year's S&ED. China wants the U.S. to narrow the national security reviews on Chinese investment, while U.S. would like to see China keep the "negative list", which details sectors barring U.S. investment, as short as possible.
Although bilateral trade relations bloomed in the past decades, investment ties lagged behind in a surprising way. China only accounts for less than one percent of total Foreign Direct Investment (FDI) in the U.S. while U.S. investment takes up three percent of China's inbound FDI.