After the summit, the US president said he expects to see the value of the yuan “go up significantly”, and that the United States was going to “be paying attention over the next several months to make that determination.”
Chinese President Hu Jintao, for his part, was more cautious over any quick end to the economic stimulus package, stressing that the world’s economic recovery was still fragile and in an early stage.
Speaking on the sidelines of the meeting, Hu Jintao spoke about monetary issues, insisting on the danger that excessive exchange rate fluctuations could threaten world financial markets.
For this reason, the world’s main economic powers refrained from pressing China too much. Many agree that if change comes too abruptly, it would undermine Beijing’s foreign debt reserves and directly affect its export capacity.
China won another victory as well. The final communiqué, which focused on balancing various priorities, did not refer to the yuan, except in vague terms as an invitation to emerging nations to enhance exchange rate flexibility.
China’s rise to international prominence and the importance of its role in the US economy have strengthened its already close ties with the United States.
China is one of the largest economies and it is leading the world in the economic recovery. It is also one of the main export markets for products “made-in-the-USA”. Above all, it is the United States’ main foreign creditor.
This gives Beijing a strong voice in shaping the rules of world governance, at a time of rising government deficits and high public debts.
The Chinese also tried to appease other world leaders by introducing some flexibility in the yuan exchange rate.
At present, the Chinese currency is at its highest level in the last five years, at 6.7890 yuan to the dollar, after the Chinese government decided to allow it to fluctuate by about 0.5 per cent.