U.S. Treasury Secretary John Snow on Wednesday said he expects payroll data on Friday to reflect strength in the economy.
Testifying before a House Appropriations subcommittee on the Treasury’s proposed fiscal 2007 budget, Snow said he believed that the economy was strong enough to help reduce federal budget deficits. “I’m looking forward to the jobs numbers on Friday. I think they’ll be good numbers,” he said.
He also said the Chinese government needed to be more flexible on the yuan valuation to fulfill commitments made in July 2005 for it to seem a more market-driven level. “They need to do more. They’re being too cautious,” Snow said.
He said President George W. Bush would discuss the issue of opening up China’s markets during an upcoming visit of Chinese President Hu Jintao.
Snow added that he expects the yuan later this year to “move more in a direction that has a higher valuation” but he did not expect a major revaluation that would take place in “one fell swoop.”
Snow also said he prefers to use “quiet diplomacy” to persuade the Chinese government to allow more flexibility in the valuation of the yuan. He said the U.S. needed to press the Chinese for greater yuan flexibility. “I prefer quiet diplomacy to other methods,” he said. “I think it will produce better results.”
Snow did not address a Treasury report due this spring that could declare whether China is manipulating its currency.