US Treasury criticizes renminbi valuation

Given comments by Timothy Geithner before his confirmation as US Treasury Secretary, it’s not all that surprising that the Obama administration would be toughening its stance on the renminbi. In its semi-annual report on exchange-rate policies (link here, for our more wonkish readers), the US Treasury Department said it had "serious concerns" about the value of the renminbi. Don’t worry – China hasn’t been branded a currency manipulator, yet. No doubt Beijing wishes it had more control over iron ore prices. After widely publicized, heated negotiations over iron ore contract prices, China’s steel mills have been forced to look to the spot market for iron ore supplies, where they’ve been paying prices of up to 80% more than they would have under prices offered by the world’s top three iron ore producers earlier this year. Still, the head of the China Iron and Steel Association said that China would not "blindly accept prices agreed to by other countries." Much friendlier negotiations have been going on in Beijing between Wen Jiabao and Iranian Vice President Reza Rahimi. To the likely disappointment of the US, Wen Jiabao praised China’s energy and trade links with the Middle Eastern country; China is not thought likely to support a US move for sanctions against Iran over its nuclear program.