9:40 AM
By Paul Eckert
WASHINGTON | Sun Sep 26, 2010 12:15pm EDT
WASHINGTON (Reuters) - Treasury Secretary Timothy Geithner faces a lonely campaign to make China's currency a major issue at the next Group of 20 summit as would-be allies shrink from confronting Beijing.
Pressured by U.S. lawmakers, Geithner vowed last week to mobilize countries at the November 11-12 summit in South Korea to press China for faster appreciation of the yuan.
Interviews with officials from G20 countries suggest that Geithner -- who has acknowledged that few countries are willing to confront China -- could be leading a posse of one in Seoul.
"The U.S. is more determined than the rest of the G20 to get something out of China on the yuan," a euro zone monetary official said, speaking on condition of anonymity.
"It's largely a bilateral matter with the rest looking on as spectators, either because they don't count enough or because they aren't very interested," the official said.
South Korean Finance Minister Yoon Jeung-hyun ruled out the yuan as a G20 topic, saying the forum might take up exchange rates in general or their impact on the global economy.
"But aside from that, I do not believe that it is appropriate to have a discussion regarding the foreign exchange rate or level of a specific country," Yoon said in an interview with Reuters in Paris on Thursday.
Geithner's drive to make China's currency policy a G20 summit issue appears to be a way to buy time for President Barack Obama's administration as it deals with an angry Congress in the run-up to November 2 U.S. elections.
The Obama administration, and Geithner in particular, had largely avoided actions that would antagonize China in past G20 meetings. But it faces an increasing drumbeat of calls for action on the yuan from beleaguered Democrats who say a stronger Chinese yuan would bring relief to American workers.
In a move likely to increase tension with China, the House of Representatives Ways and Means Committee on Friday approved a bill that would let the United States slap duties on goods from countries with undervalued currencies.
The bill may never become law, however, because it faces uncertain prospects in the Senate.
Since China's central bank in June said it would let the yuan fluctuate more freely, it has risen 1.8 percent -- accelerating the most as U.S. pressure mounted.
Many U.S. lawmakers believe that China keeps its currency undervalued by as much as 40 percent to stoke exports at the expense of U.S. jobs, a claim questioned by many economists.
BRIC SOLIDARITY, ASIAN DEPENDENCY
China can count on solidarity from its partners in the so-called BRIC countries -- Brazil, Russia and India.
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