Obama's call to revalue yuan gets quick rebuff
Source: Agencies/Shanghai Daily |
February 5, 2010, Friday
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Print Edition
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CHINA lashed back yesterday at US President Barack Obama's vow to get tougher in currency disputes, saying criticism is unhelpful and insisting its currency was at a reasonable level.
Foreign Ministry spokesman Ma Zhaoxu said China did not deliberately pursue a trade surplus with the United States.
"At the moment, looking at international balance of payments and forex market supply and demand, the level of the yuan is close to reasonable and balanced," Ma told a regular news briefing.
"The exchange rate of the renminbi is not the major reason for the Chinese-US trade deficit," he said.
"We hope the US side could objectively and rationally see a number of problems in the Chinese-US economic and trade cooperation and appropriately deal with them via negotiation," he said. "Criticism and pressing obviously is not helpful to solving problems."
Meeting with US senators in Washington on Wednesday, Obama said his administration would take a tougher line with China over trade, The Associated Press reported.
"The approach that we're taking is to try to get much tougher about enforcement of existing rules, putting constant pressure on China and other countries to open up their markets in reciprocal ways," the US president said.
"One of the challenges that we've got to address internationally is currency rates and how they match up to make sure that our goods are not artificially inflated in price and their goods are artificially deflated in price. That puts us at a huge competitive disadvantage," he said.
Analysts cautioned against reading too much into Obama's comments, saying that his words were as much aimed at a domestic audience as at China.
"Even if China wants to adjust its exchange rate, it is nearly impossible for Beijing to meet the demands of the US - this is China's own business," Li Jian, a researcher under China's Ministry of Commerce, told Reuters.
Markets, too, were not counting on a brisk rise of the Chinese currency.
"Previous tough comments on the yuan from the US administration have typically led nowhere," said a US bank dealer in Shanghai.
"The market is not sure the latest comments by Obama will really lead to a tougher US stance on the yuan."
Obama said he would not take a protectionist stance toward China, arguing that "to close ourselves off from that market would be a mistake."
Republican Senator Charles Grassley has urged Obama to formally designate China as a currency manipulator to prod Beijing into action.
Obama has twice declined to label China as a currency manipulator, but faces a third decision on that issue in April.
Finance ministers and central bank governors of the Group of Seven rich nations will discuss China's currency this weekend in Canada, a US Treasury official said.
Zuo Chuanchang, a researcher with the Academy of Macroeconomic Research, a think tank under the National Development and Reform Commission, said a row over the yuan would not lead to anything like a trade war.
"It's very normal to see some disputes between China and the United States, but this doesn't mean there will be a bust-up," he told Reuters.
"It's a political show, and it doesn't mean too much."
Foreign Ministry spokesman Ma Zhaoxu said China did not deliberately pursue a trade surplus with the United States.
"At the moment, looking at international balance of payments and forex market supply and demand, the level of the yuan is close to reasonable and balanced," Ma told a regular news briefing.
"The exchange rate of the renminbi is not the major reason for the Chinese-US trade deficit," he said.
"We hope the US side could objectively and rationally see a number of problems in the Chinese-US economic and trade cooperation and appropriately deal with them via negotiation," he said. "Criticism and pressing obviously is not helpful to solving problems."
Meeting with US senators in Washington on Wednesday, Obama said his administration would take a tougher line with China over trade, The Associated Press reported.
"The approach that we're taking is to try to get much tougher about enforcement of existing rules, putting constant pressure on China and other countries to open up their markets in reciprocal ways," the US president said.
"One of the challenges that we've got to address internationally is currency rates and how they match up to make sure that our goods are not artificially inflated in price and their goods are artificially deflated in price. That puts us at a huge competitive disadvantage," he said.
Analysts cautioned against reading too much into Obama's comments, saying that his words were as much aimed at a domestic audience as at China.
"Even if China wants to adjust its exchange rate, it is nearly impossible for Beijing to meet the demands of the US - this is China's own business," Li Jian, a researcher under China's Ministry of Commerce, told Reuters.
Markets, too, were not counting on a brisk rise of the Chinese currency.
"Previous tough comments on the yuan from the US administration have typically led nowhere," said a US bank dealer in Shanghai.
"The market is not sure the latest comments by Obama will really lead to a tougher US stance on the yuan."
Obama said he would not take a protectionist stance toward China, arguing that "to close ourselves off from that market would be a mistake."
Republican Senator Charles Grassley has urged Obama to formally designate China as a currency manipulator to prod Beijing into action.
Obama has twice declined to label China as a currency manipulator, but faces a third decision on that issue in April.
Finance ministers and central bank governors of the Group of Seven rich nations will discuss China's currency this weekend in Canada, a US Treasury official said.
Zuo Chuanchang, a researcher with the Academy of Macroeconomic Research, a think tank under the National Development and Reform Commission, said a row over the yuan would not lead to anything like a trade war.
"It's very normal to see some disputes between China and the United States, but this doesn't mean there will be a bust-up," he told Reuters.
"It's a political show, and it doesn't mean too much."
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