Yuan hits new high against US dollar
Thursday, 19 June 2008

AP, SHANGHAI, China -- The Chinese yuan kept climbing Wednesday, with the official ''parity rate'' set at an all-time high against the U.S. dollar as American and Chinese officials resumed talks centering on trade and other strategic issues.

Washington wants Beijing to loosen controls on currency trading and allow the yuan's rate to set by market forces. U.S. manufacturers contend that the restrictions keep the yuan's value artificially low, giving Chinese exporters an unfair advantage and boosting China's trade surplus.

The yuan has gained about 20 percent against the U.S. dollar since Beijing revamped its foreign exchange trading system in July 2005, revaluing the currency by 2.1 percent to 8.11 yuan to one dollar.

On Wednesday, the Chinese yuan began trading at a 6.8823, continuing a steady advance against the dollar that has taken it to fresh highs in recent weeks.

China has pledged to loosen currency controls, but has not given any timetable, saying that sudden change would expose the country's shaky financial system to excessive risks from outside speculators.

The yuan has gained about 6 percent so far this year, compared with a 6.9 percent gain in 2007.

Top finance officials from the United States and China pledged greater cooperation Tuesday on a range of economic issues from dealing with soaring energy prices to coping with the global shocks from America's subprime mortgage crisis.

But it was clear that the fourth round of high-level economic talks would leave both nations far apart on a number of contentious subjects from U.S. unhappiness over the slow pace of China's economic reforms to Chinese concerns about increasing protectionist sentiments in the United States.

U.S. Treasury Secretary Henry Paulson hoped that the two days of talks in Annapolis, Md., will produce enough results to persuade the next administration to continue the meetings. It was Paulson's brainchild to start the twice-a-year discussions in 2006.

The People's Bank of China, the central bank, announces the yuan's parity rate -- a weighted average of prices given by market makers, excluding the highest and lowest offers, early each trading morning

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