Outgoing US Commerce Secretary Don Evans urged China on Wednesday to adopt a market-driven exchange rate, saying it was the best policy to ensure long-term growth and prosperity. Evans, on his final official visit to China, lauded growing Sino-US trade ties but said Washington needed results from Beijing in "critical areas" such as intellectual property rights protection and market access.
"Market-determined exchange rates are the key to a well-functioning financial system. This is the best policy for large economies, including China's," Evans told a gathering of US businesspeople.
China's yuan currency is pegged at about 8.28 to the dollar, which US industry and labour groups have argued is artificially low, giving Chinese exports an unfair trade advantage.
On Tuesday, China posted a 2004 trade surplus of $32 billion, about triple the government's forecast. December's $11.1 billion surplus was the highest in nine years.
China did not detail trade with individual countries, but its surplus with the United States is expected to have grown from 2003's record $124 billion.
Beijing has said currency liberalisation is an ultimate goal but it will move only gradually, after it has made progress on cleaning up its rickety financial system.
The US would "actively assist" China's efforts to move to a more flexible exchange rate, Evans said.
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