US takes a pass on currency manipulation
Source: Agencies/Shanghai Daily |
July 10, 2010, Saturday
|
Print Edition
Print Edition
The Obama administration has declined in a long-delayed report to label China a currency manipulator seeking to gain unfair trade advantages against the United States.
The Treasury's semiannual currency report, originally due on April 15, said China's yuan remains undervalued. But it noted China made a "significant" move last month by ending a link between the value of the yuan -- also called the renminbi -- and the dollar.
In a statement, Treasury Secretary Timothy Geithner said the administration will be watching the currency changes closely in coming months. The Treasury is required to issue the currency report every six months.
"What matters is how far and how fast the renminbi appreciates," Geithner said. "We will closely and regularly monitor the appreciation of the renminbi and will continue to work toward expanded US export opportunities in China that support employment in the United States."
Lawmakers on Capitol Hill criticized the findings. Some vowed to push legislation to impose stiff penalties on Chinese imports if China does not move more quickly to revalue its currency.
Senate Finance Committee Chairman Max Baucus said the administration must be aggressive in pushing China on the currency issue.
"A few weeks ago, China took a small step ... but small steps are not enough," Baucus said. "China must take significant steps to appreciate its currency and I expect those steps to happen soon."
No country was named a currency manipulator, a designation that could trigger negotiations leading to the possible imposition of higher tariffs on imports.
A stronger Chinese currency would make US goods cheaper in China and would make Chinese goods more expensive for American consumers. That would boost US exports to China and help dampen demand among American consumers for Chinese products.
Impact debated
However, many private economists argue that there are a variety of reasons for America's huge trade deficit with China. A change in the currency values would have only limited impact on the deficit, they say.
Geithner has said on many occasions that "China is a sovereign country, and China is going to have to decide its exchange rate."
The report gave a comparatively objective evaluation of China's role in the current global economic recovery.
It said China was a significant source of economic support in 2009, generating a 13 percent increase in domestic demand that contributed 1.6 percentage points to global growth at a time when total world demand declined 0.6 percent.
The Treasury's semiannual currency report, originally due on April 15, said China's yuan remains undervalued. But it noted China made a "significant" move last month by ending a link between the value of the yuan -- also called the renminbi -- and the dollar.
In a statement, Treasury Secretary Timothy Geithner said the administration will be watching the currency changes closely in coming months. The Treasury is required to issue the currency report every six months.
"What matters is how far and how fast the renminbi appreciates," Geithner said. "We will closely and regularly monitor the appreciation of the renminbi and will continue to work toward expanded US export opportunities in China that support employment in the United States."
Lawmakers on Capitol Hill criticized the findings. Some vowed to push legislation to impose stiff penalties on Chinese imports if China does not move more quickly to revalue its currency.
Senate Finance Committee Chairman Max Baucus said the administration must be aggressive in pushing China on the currency issue.
"A few weeks ago, China took a small step ... but small steps are not enough," Baucus said. "China must take significant steps to appreciate its currency and I expect those steps to happen soon."
No country was named a currency manipulator, a designation that could trigger negotiations leading to the possible imposition of higher tariffs on imports.
A stronger Chinese currency would make US goods cheaper in China and would make Chinese goods more expensive for American consumers. That would boost US exports to China and help dampen demand among American consumers for Chinese products.
Impact debated
However, many private economists argue that there are a variety of reasons for America's huge trade deficit with China. A change in the currency values would have only limited impact on the deficit, they say.
Geithner has said on many occasions that "China is a sovereign country, and China is going to have to decide its exchange rate."
The report gave a comparatively objective evaluation of China's role in the current global economic recovery.
It said China was a significant source of economic support in 2009, generating a 13 percent increase in domestic demand that contributed 1.6 percentage points to global growth at a time when total world demand declined 0.6 percent.
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