Snow says China should change currency policies

US Treasury Secretary John Snow said Thursday that China should change currency practices that American manufacturers blame for soaring US trade deficits.

In his prepared testimony before the Senate Banking Committee, Snow said: "China is now ready and should move without delay in a manner and magnitude that is sufficiently reflective of underlying market conditions."

Snow repeated a warning made in a currency report sent to the US Congress last week: China could be cited by the US government as a currency manipulator, a process that could lead to economic sanctions, if it does not act soon.

"If current trends continue without substantial alteration, China's policies will likely meet the technical requirements of the statute for designation," Snow said.

Chinese Premier Wen Jiabao said recently that China regards the reform of the exchange rate of the Chinese yuan as an issue of sovereignty and will never yield to any external pressure. He stressed that China will implement reforms once the conditions are right, even without foreign pressure.

US Federal Reserve (Fed) Chairman Alan Greenspan also said last week that a move by China to revalue its currency "probably quite unlikely" to reduce the US overall trade imbalance.

Source: Xinhua