US Treasury Secretary John Snow urged China to relax its grip on the yuan to stimulate global growth.

Snow applauded China for taking a 'historic step' in July to end the yuan's decade-old peg to the US dollar in favor of a managed float against a basket of currencies, and to revalue it by 2.1 pct.

But he said Beijing needed to go further.

'We are anxious to see the Chinese fulfill the commitment they made to allow market forces play a larger role in setting the value of their exchange rate over time. We'd like to see China continue on that path and see more flexibility,' Snow told reporters here on the first stop of a tour of East Asia.

While welcoming recent steps by China to relax its currency regime, the US administration says the yuan remains undervalued against the dollar -- at the cost, it complains, of millions of US jobs lost to cheap Chinese imports.

Snow said that Washington is not alone in its desire to see Beijing embrace greater currency reform, noting that the G7 has made similar calls.

'It's a view that's articulated because greater flexibility is genuinely in the interest of China. It will also lead to better results for the global economy,' Snow said.

He said currency reform needs to be coupled with efforts by China to boost domestic demand, saying: 'We see the two going hand-in-hand'.

Snow is due to began a week-long visit to China later today.

http://www.forbes.com/markets/feeds/afx/2005/10/10/afx2269178.html