China Needs Greater U.S. Support for Evolving Yuan

BEIJING -- As policymakers from the world's two largest economies gather in Washington for the third U.S.-China Strategic and Economic Dialogue, the Chinese yuan is trading at a 30-year high against the dollar, while its convertibility has expanded significantly since this time last year, and bullish sentiment surrounds its future evolution.

Although this may suggest China is finally getting serious about rationalizing the value of the yuan, recent measures are geared toward internationalization rather than genuine liberalization, and China's economy is still decades away from being able to support a free-floating currency. It is in the U.S. interest to support Beijing in this transition, and this week's meeting is an opportunity to improve cooperation on the subject. ...