US presses China to continue reforms after yuan devalued

US Treasury Secretary Jacob Lew pressed China to continue with economic and financial reforms Friday in the wake of Beijing's surprise devaluation of the yuan last week.

Lew told Chinese Vice Premier Wang Yang in a phone conversation that Washington recognized the progress China had made on financial reform, especially toward a more transparent, market-determined exchange rate for the yuan, according to a Treasury Department account of the call.

"But, Secretary Lew emphasized that it is critical China continue with reforms which are necessary to move towards an economy driven primarily by household consumption rather than exports, which is in both China's and America's best interests," the Treasury said.

Long under US pressure to free up its controls on the yuan, which Washington has seen as undervalued versus the dollar, Beijing let the currency drop 2.8 percent last week in response to a weakening economy.

The People's Bank of China also adjusted the way the yuan's value is set to better reflect market trends, although the value has moved little since the initial slide of August 10-12.

Washington remains worried that a weaker yuan policy would aim at promoting Chinese exports at the expense of imports.

Lew was speaking with Wang ahead of the visit to Washington by Chinese President Xi Jinping in September, when China's economic policies will be one of several key topics for discussion with US President Barack Obama.