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Pressing China on yuan will hurt US economy
Source: Xinhua |
March 20, 2010, Saturday
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Print Edition
Print Edition
THE efforts by US legislators to pressure China to reform its currency is to make China a scapegoat for US domestic politics, and may actually hurt the US economy, according to articles published by well-known US media in the past two days.
The Wall Street Journal on Thursday said that US lawmakers "want to make the yuan a scapegoat and risk a trade war with China," referring to a US Senator bill proposed Tuesday calling for China to appreciate its currency yuan.
Under the pressure of an election year and high unemployment, US Democratic Senator Chuck Schumer and four other senators unveiled a legislation to threaten China with punitive duties on goods from China if it does not let the yuan appreciate against the US dollar.
"China is right to resist these calls, not least because a large revaluation could damage China's growth," the Wall Street Journal said in its Review and Outlook column. "China has helped to lead the global economy out of this recession, and the world needs that to continue."
In another article titled "Pressing China on the yuan won't work," which was published by the Time magazine Website on Wednesday, Michael Schuman said that the Schumer bill "clearly shows how politicized the yuan has become."
The article said that Beijing is "an easy target for Americans worried by high unemployment and an uncertain recovery to blame for the country's economic woes."
But "a stronger yuan isn't a panacea to American economic problems."
Schuman said that "there is a belief that if China allowed the yuan to appreciate, US industry would become more competitive and the giant trade deficit with China would evaporate. But that could very well be wishful thinking."
He pointed out that when the yuan was appreciating against the US dollar, from 2005 to 2008, the US trade deficit with China actually increased.
The article also said that the Chinese are highly sensitive to criticism and pressure on this front, and threats from the US Senate only corner Beijing into a position where it becomes politically difficult for the government to take any action.
The Wall Street Journal on Thursday said that US lawmakers "want to make the yuan a scapegoat and risk a trade war with China," referring to a US Senator bill proposed Tuesday calling for China to appreciate its currency yuan.
Under the pressure of an election year and high unemployment, US Democratic Senator Chuck Schumer and four other senators unveiled a legislation to threaten China with punitive duties on goods from China if it does not let the yuan appreciate against the US dollar.
"China is right to resist these calls, not least because a large revaluation could damage China's growth," the Wall Street Journal said in its Review and Outlook column. "China has helped to lead the global economy out of this recession, and the world needs that to continue."
In another article titled "Pressing China on the yuan won't work," which was published by the Time magazine Website on Wednesday, Michael Schuman said that the Schumer bill "clearly shows how politicized the yuan has become."
The article said that Beijing is "an easy target for Americans worried by high unemployment and an uncertain recovery to blame for the country's economic woes."
But "a stronger yuan isn't a panacea to American economic problems."
Schuman said that "there is a belief that if China allowed the yuan to appreciate, US industry would become more competitive and the giant trade deficit with China would evaporate. But that could very well be wishful thinking."
He pointed out that when the yuan was appreciating against the US dollar, from 2005 to 2008, the US trade deficit with China actually increased.
The article also said that the Chinese are highly sensitive to criticism and pressure on this front, and threats from the US Senate only corner Beijing into a position where it becomes politically difficult for the government to take any action.
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