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US, China at odds over exchange rate of yuan

US and Chinese officials remain divided over China's policy to control the exchange rate of its currency, the yuan, against the US dollar.

The officials started a 2-day Strategic and Economic Dialogue in Beijing on Wednesday.

US Treasury Secretary Jack Lew demanded that China make its currency more flexible. He said moving to a market-determined exchange rate will be a crucial step.

The US has complained that China keeps the value of its currency artificially low to make its exports cheaper.

Chinese Finance Minister Lou Jiwei pointed out that tapering in the US monetary stimulus has caused money to flow out of emerging economies.

Lou defended the country's currency interventions, saying that it's difficult to raise the exchange-rate issue when cross-border capital flows are not normal.

During the high-level talks, the officials also highlighted differences between the 2 countries over what China calls a new model of superpower relations.

In an opening session, Chinese President Xi Jinping urged the United States to respect China's sovereignty, territorial integrity, and its choice of path of development.

US Secretary of State John Kerry said the United States welcomes a peaceful, stable China that contributes to regional stability and development and plays a responsible role in world affairs.

Attention is focused on what message the 2 sides will deliver at a news conference after ending the talks on Thursday.

Jul. 9, 2014 - Updated 16:45 UTC