Geithner Heading To China; Could Discuss The Yuan

Secretary of Treasury Timothy Geithner will travel to Beijing this week to meet with Chinese Vice Premier Wang Qishan in an effort to discuss pressing economic issues - including, some say, China's alleged undervaluing of the yuan.

The yuan was pegged to the U.S. dollar from the 1970's to 2005, when it began to move towards a managed floating exchange rate. In July, 2008, the yuan was pegged to the dollar again - which, according to Chinese leadership, was due to the economic crisis.

Critics claim that China is intentionally undervaluing its currency to keep its exports cheap and the trade gap with the U.S. in China's favor. The alleged undervaluation is estimated to be around 20-40% lower than a floating rate.

China has discussed ending the peg in recent months, and could move towards a floating rate on its own initiative, without these talks - which may not even be about this particular issue at all. If these are the issues at hand for Geithner's trip, though, the Chinese are not likely to be receptive to such discussions.