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UPDATE 1-Diplomacy best option on Chinese currency-W.House

Published 04/06/2010, 02:00 PM
Updated 04/06/2010, 02:20 PM

(Updates with more Gibbs remarks, details)

WASHINGTON, April 6 (Reuters) - The White House on Tuesday reiterated President Barack Obama's desire that China shift its yuan currency to a more market-based method of foreign exchange valuation and stressed this would be pursued through dialogue.

"The administration will continue to press the Chinese to ... value their currency in a way that is much more market based," said White House press secretary Robert Gibbs, citing upcoming meetings of the Group of 20 and bilateral discussions between the United States and China as venues for talk.

"That is the way we think is best at this point, and I think you've seen reports of the past week or so about the Chinese beginning to take some steps and realize on their own that this is the best path for them," Gibbs told a briefing.

U.S. Treasury Secretary Timothy Geithner on Saturday said he would postpone publication of a controversial annual report that U.S. lawmakers had demanded be used to name China a currency manipulator, taking a step toward trade retaliation.

U.S. manufacturers and their allies in the U.S. Congress complain that Beijing unfairly holds the value of its yuan currency down against the dollar to make Chinese exports more competitive -- a concern that some European nations also share.

"There is no doubt that this is of great concern to a number of economies around the world. I think the best thing to do is let Secretary Geithner and others work through this process in these upcoming meetings and evaluate where we are," Gibbs said.

Geithner's move spares Chinese President Hu Jintao potential embarrassment when he attends a nuclear security summit in Washington next week. Hu will also hold bilateral talks with Obama on the sidelines of the meeting, Gibbs said.

(Reporting by Alister Bull; Editing by Sandra Maler)

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