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Greenspan urges China to trade currency more freely
Beijing: The U.S. Federal Reserve chairman Alan Greenspan has urged China to allow its currency to trade more freely for the sake of its own financial health.

"I've said on numerous occasions I think it is to the advantage of China to allow a little more flexibility in the exchange rate," Greenspan told a conference of central bankers in Beijing. He added: "It is something that I am certain they will take on reasonably soon."

To maintain its currency controls, China has to buy large quantities of U.S. dollars.

But such an arrangement "cannot go on indefinitely," Greenspan said, adding that the system hurts China by encouraging the inefficient allocation of economic resources.
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