U.S. Treasury Secretary Jacob J. Lew reiterated concerns that a China-led infrastructure bank will fall short of international standards even as the rest of the world’s biggest economies sign up for the initiative.
“We very much welcome China’s increased participation in infrastructure investment, and the concerns we’ve raised about the needs for standards continue,” Lew told reporters in Beijing on Monday after a day of meetings there with leaders including Premier Li Keqiang.
China is seeing European nations including Germany and the U.K., along with other U.S. allies such as Australia and South Korea, seek to join the new institution in defiance of U.S. warnings that it may lack the standards of institutions such as the World Bank. Japan is likely to join the infrastructure bank within a few months after pressure from companies there, according to the nation’s ambassador to China, the Financial Times reported Monday.
“There is enough infrastructure need for new and existing institutions, and more resources on top of that,” Lew said. “Our conversation was a cooperative and collaborative one about working together. The initial decisions of what kinds of projects are invested in will obviously be a very important signal as to how they’ll proceed.”
All countries interested in the infrastructure bank are welcome to join, Chinese Vice Finance Minister Shi Yaobin said last week, according to the official Xinhua News Agency. China will respect the decision of the U.S. and other nations whether or when they join, Shi said.
Lew was visiting Beijing to discuss bilateral economic issues and this year’s U.S.-China Strategic and Economic Dialogue, to be held in Washington. The dialogue was established in 2009 to advance relations between the world’s two biggest economies.
Lew will also give a speech on U.S.-China relations in San Francisco on Tuesday.
While China has done more to let the yuan’s exchange rate be set by markets, vigilance on the issue is still needed, Lew said.
“Our fundamental objective is that American workers and American products can compete fairly in international markets and there won’t be unfair intervention,” Lew said. “We’ve finally seen some important movement, but that doesn’t mean we can take our eye off the ball. They know moving toward a more market-oriented currency is critical for their economic plans.”
There are signs that China has been intervening to prop up the yuan instead of weaken it, as the nation’s economic growth slows and money flows out. The yuan is little changed against the dollar over the past year, while most currencies have fallen against the greenback.
© Copyright 2023 Bloomberg News. All rights reserved.