Timothy Geithner backs strong US dollar, praises China

Treasury Secretary Timothy Geithner yesterday said a strong dollar was "very important" to the United States and praised China's role in the global economic recovery.

After an Asia-Pacific meeting here, Mr Geithner also said President Barack Obama's US administration would persist with its hefty stimulus spending for now.

"It is very important to the United States that we have a strong dollar, that we continue to focus on improving our fundamentals, that we sustain confidence in not just the stability of our financial system but in our capacity as a country, as growth recovers, to move our fiscal position back in the balance," he told a press conference.

"That's going to be very important to recovery in the United States," he said after a meeting of 21 finance ministers from the Asia-Pacific Economic Cooperation group that also includes China, Japan and Russia.

Mr Geithner acknowledged that given the importance of the US economy and its currency, "we bear a special responsibility for being a source of stability and strength for the global economy".

Asian exporters are suffering from the dollar's prolonged slump, which allied with the Chinese yuan's government-fixed stability is eroding their competitiveness.

Mr Geithner side-stepped questions over whether Beijing is artificially weakening its currency to boost Chinese exports.

But he said: "China is playing a major role in helping contribute to recovery."

Beijing's reform agenda provides "a very promising basis for helping underpin a more solid foundation for growth in the future, not just in this region but around the world", he said.

Thai Finance Minister Korn Chatikavanij said Geithner did not face a grilling over the dollar at the Apec gathering, "but the issue is there".

"The US secretary reaffirmed what he said in Japan which is that he is committed to a strong dollar policy, and that is good enough for us," he told reporters.