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Asia Ends the Week Higher, China Stocks Dip

This is a transcript of top stories presented by China's CCTV Business Channel as produced by CNBC Asia Pacific.

Hello to our viewers all over China.

You're watching “Asia Market Daily”, co-produced by CCTV Business Channel and CNBC, first in business worldwide.

I am Christine Tan and here are the top stories across Asia today.

US Treasury Secretary Timothy Geithner is promising a global discussion on China's currency policy.

In his testimony to the U.S. House of Representatives, Geithner made two points:

He's going to raise the dispute with the G20 in November when world leaders meet in Seoul and he reiterated China wasn't allowing its currency to strengthen fast enough.

(SOT) Timothy Geithner, U.S. Treasury Secretary:

"Now it is the judgment of the IMF that in view of the very limited movement in the Chinese currency, the rapid pace of productivity and income growth in China relative to its trading partners, the size of its current account surplus, and the substantial level of ongoing intervention in exchange markets to limit the appreciation of the Chinese currency, the renminbi is significantly undervalued."

That drew a terse response from Beijing. Foreign ministry spokeswoman Jiang Yu warned pressure from Washington could backfire.

(SOT) Jiang Yu, Foreign Ministry Spokeswoman:

“We have always maintained that problems in trade and economic relations between our two countries should be appropriately resolved through consultation on an equal basis. I believe that pressure not only would fail to solve the problems; on the contrary, it could have the opposite effect."

In the meantime, People's Bank of China has set the yuan's daily mid-point versus the dollar at a higher level for a sixth day at 6.7172.

The Chinese currency has appreciated some 1.5 percent against the dollar since June.

But Geithner has said this is "too small to make a material difference to the U.S. economy".

U.S. Lawmakers are also considering legislation to punish china for what they deem is a currency policy that undervalues the yuan by as much as 40 percent.

CNBC's Geoff Cutmore caught up with Zhu Min, Special Advisor to the IMF, who is also the former central banker at People's Bank of China and asked him about the pressure of the yuan right now.

(Package starts)

Zhu: We need G20 to provide further leadership, get the countries and global economies to move forward and together solve this very important issue. I think everyone understands, everyone also understands that global cooperation is the only way to solve this issue.

Cutmore: Now that you have had time to digest Basel III cap adequacy numbers, how useful do you think this is going to be in helping stabilization of fin economy?

Zhu: Well it's good, I would say we have the Basel set the standards because of crisis we have to further reform the regulatory regime and improve the cap base and make sure all the fin systems are sound. But the more important is implementation and moving faster is more important. Currently there are a few things going separate ways. On top we have countries pass legislation like US Dodd-Frank things then we also have FSB, FSB also work on standardized code for int'l fin sector and promote fin cooperation to adopt the same stance. How those 3 things work together I think that is very important. I mean currently it's clear we have a roadmap and framework but the details are not there. The guidelines. For example if you impose the cap adequacy ratio, the few things you have to understand are accounting standards. Because the whole thing that gets capital adequacy wrong is accounting standards right. So you have to impose the same accounting standards in all the member countries otherwise it will be very different.

Cutmore: What then is the risk that these policies will inhibit credit expansion?

Zhu: That's a very good question. But the credit expansion in real economy varies across different regions. For example credit growth in advancing economies, if you see 3 to 5%, after 10%, would be very strong. If you looking at emerging market it can go 10 to 20%, even 25% because the economies are in different stage, in different demand. So I would say using credit growth as measure to see the risk, not necessarily meaningful for the regulatory things.

Cutmore: The IMF has suggested there are rising risks of slower growth end of year, you have been in no double dip camp, considering revising?

Zhu: We observed the global economic slowdown in the past few months. Global exports slowdown, industrial production slowdown, NPR index also downsized I think the evidence is there. This recovery is still relatively weak, but the economy keeps recovering. At this stage I think it will be too early to make judge whether this slowdown is permanent shifting downwards or just temporary moving back. I think too early, third qtr and 4th quarter data will be very important. But we don't think there will be a double dip situation.

(Package ends)

Japanese Finance minister Yoshihiko Noda says Japan will intervene again in the forex markets, if needed.

This despite complaints from US and European politicians about Tokyo's moves.

Overnight, the chairman of euro zone finance ministers said he was unhappy about Japan's recent unilateral intervention in currency markets.

(SOT) Jean Claude Juncker, Chairman of Euro Zone Finance Ministers:

“We think that the Yen in its relations with the euro is not over valued but is still under valued and we didn't like the way the Japanese authorities were dealing with that matter.”

Jean Claude Juncker, who is also Luxembourg's prime minister, said that intervention would only work if it were coordinated.

And finally, a look at how the Asian financial markets performed today.

Stocks in the region gained, driving the MSCI Asia Pacific index higher for a third week.

In Japan the benchmark Nikkei 225 closed up by 1.2 percent and was the best performer - as a weaker yen boosted the outlook for Japan's exporters

Meantime, South Korea's KOSPI finished at a new high for the year closing at 1827.

Tech stocks led the gains amid continued foreign funds inflow.

LG Electronics rallied as the firm named a new CEO in its latest move to turn the company's loss-making mobile business around.

In Australia, the S&P ASX 200 was up 0.9 percent.

Weaker metal prices had pushed some mining stocks lower, but the overall market managed to end up for the week.

Well, that wraps up today's business highlights.

I'm Christine Tan from CNBC.

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