Huntsman urges more pressure on China currency

Reuters News
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Posted: Jun 23, 2011 4:13 PM
Huntsman urges more pressure on China currency

MIAMI (Reuters) - Pressure should be kept on China to allow its currency to rise faster in value though Beijing already recognizes the need for a stronger "market-based" yuan, U.S. Republican presidential candidate Jon Huntsman said on Thursday.

Huntsman, a former Utah governor who stepped down as U.S. ambassador to China in April, spoke of the Chinese currency issue as he kicked off his bid for the White House in the key battleground state of Florida.

He formally launched his campaign this week.

The issue dogged U.S.-China relations during his time in Beijing, where Huntsman was known for championing the agenda of U.S. businesses worried about the overvalued yuan, intellectual property rights and unfair competition.

"You've got to keep hammering on the value of the Chinese currency," Huntsman told reporters, after meeting with local business leaders at a restaurant in the heart of the Miami's Cuban exile community.

He said the yuan had appreciated slowly since it was depegged from the dollar in June 2010 but was still "17 percent discounted" or undervalued against the dollar.

U.S. critics say China's currency gives it an unfair advantage by reducing the price of its goods sold in the United States and making U.S. exports to China more expensive.

"It (the yuan) must increase more aggressively as it finds a proper market valuation," Huntsman, 51, said.

Many conservatives see his work in the Obama administration as a liability. But Huntsman has a long-standing interest in China and the Far East, and he clearly seemed to play it as a strength in his comments on Thursday.

Asked about U.S. leverage in the currency debate with China, Washington's biggest lender, Huntsman said Beijing already recognized the need for a stronger currency.

"Whether we or Brazil or (the) European Union are talking about it, they've discovered themselves that they have to have a market-based currency," he said.

"The leverage first and foremost is the fact that they recognize that they must do it themselves," he said without elaborating.

He also said the U.S. trade deficit with China would begin to shrink once the yuan was allowed to climb to fair market value. "We're going to have unprecedented export opportunities in China," Huntsman said.

"Like in the case with Korea and Taiwan 20 and 30 years ago, where we ran enormous deficits, you're going to see those numbers begin to turn with more export opportunities for U.S. businesses," he said.

(Reporting by Tom Brown; Editing by Paul Simao)