Geithner Says U.S. Favors Significant Yuan Appreciation

Treasury Secretary Timothy Geithner said the U.S. favors a "gradual, but still significant" appreciation of the yuan.

Geithner said the U.S. would prefer China let market forces drive up the value of the currency, The Wall Street Journal said. Geithner noted that the yuan had strengthened by about 2.5% in six weeks.

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"What we want to do is to maximize the incentives they have to let that process go as far as it needs to go," Geithner said. "I'm very confident over time that this is going to happen."

Such a policy is in Chinese interest, as a stronger currency would help stimulate domestic demand, the Treasury Secretary said.

"China, over time, wants to get better at producing things that create more value, generate more income for their people; and you can't do that if you're in effect favoring low-value-added assembly operations that aren't going to generate much income for your people," Geithner said.

Geithner said there was "no risk" of a currency war.