Obama urged to block 'harmful' currency bill
By Wang Yanlin |
October 13, 2011, Thursday
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Print Edition
Print Edition
CHINA has urged the Obama administration to block a controversial currency bill aimed at putting pressure on the country to appreciate the yuan.
The bill is a protectionist step that "gravely violates World Trade Organization rules," Foreign Ministry spokesman Ma Zhaoxu said yesterday after the US Senate approved it in a 63-35 vote and sent it to House of Representatives.
Ma said the move was "harmful and unbeneficial."
"China calls on the US government, Congress and various communities to firmly oppose the wrongdoings of pressuring the yuan exchange rate by US legislation," Ma said. "We should resist protectionism, resist politicization of economic and trade issues, and safeguard the healthy development of Sino-US relations."
The legislation will "disrupt the shared efforts of China and the United States, as well as the international community, to promote vigorous recovery and growth in the global economy," said Ma.
A Ministry of Commerce spokesman said the bill sent a "false signal of escalating trade protectionism" that threatened global economic recovery.
In a written statement, Shen Danyang added: "It severely violates the international rule, putting a stable Sino-US economic and financial relationship at risk while running against the global efforts of fighting against protectionism."
The Currency Exchange Rate Oversight Reform Act passed by the Senate would, if it became law, allow the US to raise tariffs on Chinese imports it says are unfairly cheap due to an undervalued yuan.
Tan Yaling, president of the China Forex Investment Research Institute, said the bill was unreasonable as the US had adopted a wrong criteria to judge China, which remained a developing country with a currency that is not fully convertible.
"A sharply rising yuan will be very dangerous. It will do harm to the already shaky global economic recovery while doing nothing good on the reduction of US joblessness," Tan said. "The US should realize that China is a partner, not a rival, in terms of bilateral trade. Otherwise, it will be a lose-lose situation and both countries will get hurt."
However, the bill is unlikely to become law as it lacks the support of the majority Republican leadership in the House. And the White House and President Barack Obama, although not coming out against the bill, have shown they are uncomfortable with it, according to the Associated Press.
Dan Steinbock, research director of international business at the India, China and America Institute, an independent think tank based in the US, said the bill would face overwhelming hurdles before it could become law.
"Backing for the bill comes from the pressure of political positioning for the 2012 presidential election," Steinbock said in a recent article. "After all, the House of Representatives is wary of unilateral sanctions against China, and shows little interest in bringing the bill to a vote."
Huang Yiping, an economist at Barclays Capital, also believes that the bill will not become policy given it still needs to be passed by the House and signed by the president.
"But the Senate's passage is already sufficient to sour the atmosphere for bilateral cooperation at a time when it is most needed to maintain global growth and stability," Huang said.
The America Chamber of Commerce in China has also criticized the bill as a threat to trade and financial relations.
The bill is a protectionist step that "gravely violates World Trade Organization rules," Foreign Ministry spokesman Ma Zhaoxu said yesterday after the US Senate approved it in a 63-35 vote and sent it to House of Representatives.
Ma said the move was "harmful and unbeneficial."
"China calls on the US government, Congress and various communities to firmly oppose the wrongdoings of pressuring the yuan exchange rate by US legislation," Ma said. "We should resist protectionism, resist politicization of economic and trade issues, and safeguard the healthy development of Sino-US relations."
The legislation will "disrupt the shared efforts of China and the United States, as well as the international community, to promote vigorous recovery and growth in the global economy," said Ma.
A Ministry of Commerce spokesman said the bill sent a "false signal of escalating trade protectionism" that threatened global economic recovery.
In a written statement, Shen Danyang added: "It severely violates the international rule, putting a stable Sino-US economic and financial relationship at risk while running against the global efforts of fighting against protectionism."
The Currency Exchange Rate Oversight Reform Act passed by the Senate would, if it became law, allow the US to raise tariffs on Chinese imports it says are unfairly cheap due to an undervalued yuan.
Tan Yaling, president of the China Forex Investment Research Institute, said the bill was unreasonable as the US had adopted a wrong criteria to judge China, which remained a developing country with a currency that is not fully convertible.
"A sharply rising yuan will be very dangerous. It will do harm to the already shaky global economic recovery while doing nothing good on the reduction of US joblessness," Tan said. "The US should realize that China is a partner, not a rival, in terms of bilateral trade. Otherwise, it will be a lose-lose situation and both countries will get hurt."
However, the bill is unlikely to become law as it lacks the support of the majority Republican leadership in the House. And the White House and President Barack Obama, although not coming out against the bill, have shown they are uncomfortable with it, according to the Associated Press.
Dan Steinbock, research director of international business at the India, China and America Institute, an independent think tank based in the US, said the bill would face overwhelming hurdles before it could become law.
"Backing for the bill comes from the pressure of political positioning for the 2012 presidential election," Steinbock said in a recent article. "After all, the House of Representatives is wary of unilateral sanctions against China, and shows little interest in bringing the bill to a vote."
Huang Yiping, an economist at Barclays Capital, also believes that the bill will not become policy given it still needs to be passed by the House and signed by the president.
"But the Senate's passage is already sufficient to sour the atmosphere for bilateral cooperation at a time when it is most needed to maintain global growth and stability," Huang said.
The America Chamber of Commerce in China has also criticized the bill as a threat to trade and financial relations.
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