China offered its first real sign of flexibility in years over the exchange rate of its currency, a growing source of friction with the U.S., but gave little hope that it would accommodate Washington on Iran and other thorny foreign-policy issues.
Central bank Gov. Zhou Xiaochuan said China will eventually move away from its current exchange-rate policies, which he described as a temporary response to the global financial crisis, but played down the idea that a move could come in the near future.
Mr. Zhou’s comments Saturday at a press conference during the annual session of China’s legislature, the National People’s Congress, could fuel optimism in the U.S. and other countries upset over China’s currency policy that Beijing may start letting the yuan appreciate, although not as quickly as many foreign governments desire. Critics complain that the yuan’s suppressed value makes China’s exports unfairly inexpensive, disadvantaging other countries.
China’s foreign minister sounded a defiant note on other sensitive issues with the U.S. in a separate briefing Sunday. Yang Jiechi told reporters it is up to the U.S. to mend frayed relations, which he said had been hurt by American arms sales to Taiwan and by President Barack Obama’s meeting with exiled Tibetan spiritual leader the Dalai Lama.