U.S. senators ratchet up pressure on the Chinese currency, yuan, amid economic woes

WASHINGTON, March 16, 2010 (Xinhua) --

Under the pressure of the election year and high unemployment, some U.S. senators proposed legislation on Tuesday to press China to appreciate its currency.

Five senators introduced the Schumer-Stabenow-Graham Currency Exchange Rate Oversight Act of 2010 at a press conference at the Capitol Hill.

Democratic Senator Chuck Schumer said that China's currency renminbi is undervalued and he has kept pushing the U.S. government to press China to strengthen its currency.

U.S. Senator Charles Schumer, Senator Debbie Stabenow, Senator Sam Brownback (SPEAKER), Senator Sherrod Brown and Senator Lindsey Graham (L to R) attend a press conference on China's currency in Washington, capital of the United States, March 16, 2010. Under the pressure of the election year and high unemployment, some U.S. senators proposed legislation on Tuesday to press China to appreciate its currency. (Xinhua/Zhang Jun)

The Schumer bill requires the U.S. Treasury Department to identify countries with "fundamentally misaligned currencies" and asked the Commerce Department to investigate currency undervaluation as a "countervailable subsidy."

The United States recently ratcheted up pressure on China to realign its currency. On Monday, 130 U.S. congressmen wrote to the government, demanding the Obama administration take actions to appreciate yuan against the dollar.

China has dismissed calls for revaluation of its currency. The country's managed floating exchange rate system, in place since July 2005, is market-based, said Chinese Commerce Ministry spokesman Yao Jian on Tuesday.

"It would be unfounded and meaningless for some people in the United States to back their calls (for China to be labeled a currency manipulator) by citing China's trade surplus and U.S. deficit and the U.S. recovery needs," Yao said.

Editor: Wang Guanqun

Hypocrisy over renminbi

BEIJING, March 17, 2010 --

All the blame that United States politicians are placing on the Chinese currency amounts to nothing but political myopia.

In a letter to the US secretary of the treasury and commerce secretary, 130 US congressmen demanded Monday that the Obama administration get tough with China over its currency practices, insisting that a devalued exchange rate provides a subsidy to Chinese companies and puts foreign competitors at a disadvantage.

Some of these US politicians, if not all, tend to make use of the accusation on the Chinese currency to curry support from voters who are worried about the US unemployment rate.

It may be a time-honored habit for US lawmakers to blame a foreign country for domestic economic woes in tough times. But it only reveals perilous political inertia when strength is needed to meet the real challenges in a time of crisis.

Their exaggeration of the impact of China's currency policy on the US economy will blind US people to the causes of the current crisis and thus delay meaningful reforms to fix them.

If they are serious about the global competitiveness of US companies, these congressmen should for example, ask General Motors management why they made large profits in China last year while requiring multibillion-dollar bailouts at home. China's foreign exchange rate can hardly be part of the answer because the US automaker has already localized its production. The truth may lie at the much higher US labor costs, an obvious problem that few US politician have so far been brave enough to face, not to mention fix.

Besides, the consequences of a revaluation of the renminbi must include a diversification of Chinese investment from US Treasury bonds into other US assets. If they are not yet ready for more US hi-tech exports to China or Chinese acquisition of top US companies, these congressmen should be careful about what they are asking for.

(Source: China Daily)

Editor: Jiang Yuxia

China faces most complicated year, keeping yuan stable

by Xinhua writers Liu Jie, Wang Yaguang and Chen Yongrong

BEIJING, March 14, 2010 (Xinhua) --

Chinese Premier Wen Jiabao said on Sunday that China is facing the "most complicated" economic conditions this year, and it will be "very cautious and flexible" in choosing the timing of the stimulus exist to shore up the hard-won recovery.

Since the world economy still faces the risk of "double dip", China has to strike a balance between maintaining economic growth, adjusting economic development model and managing inflation expectations, Wen told reporters after the conclusion of the annual parliamentary session.

As China has come under huge pressure for strengthening its currency, or yuan, Wen said China opposed to "fingerpointing" of its currency policy, and pledged to keep the yuan stable at an appropriate and balanced level.

Editor: Xiong Tong

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