China has pledged to continue reforms to its exchange rate policies at the beginning of high level trade talks with the US.

BBC News
24 May 2010

Speaking at the opening of the talks, President Hu Jintao said he would seek “gradual progress” on reforming the exchange rate of the Chinese yuan.

The US argues China’s currency policy unfairly favours its exporters.

North Korea will also be discussed, following its apparent attack on a South Korean warship.

Although not referring to North Korea directly, President Hu stressed that cooperation was needed to deal with “international hot spots”.

China is North Korea’s closest ally, and has so far refrained from openly criticising its actions.
Yuan ‘undervalued’
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We welcome the fact that China’s leaders have recognised that reform of the exchange rate is an important part of their broader reform agenda

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Meanwhile the currency is top of the economic agenda.

The US argues that the yuan is deliberately undervalued, giving Chinese exporters an unfair advantage in global markets.

“China will continue to steadily advance the reform of the formation of the… exchange rate mechanism under the principle of independent decision-making, controllability and gradual progress,” President Hu said.     more …