US Congress must keep pressing China on yuan: SenatorApr 13, 2010
The US Congress must keep up pressure on China to revalue its currency despite Beijing's apparent new willingness to seek fresh sanctions on Iran, a key US Senator said Tuesday.
"My view is that there should not be a trade-off," said Democratic Senator Chuck Schumer of New York, a key author of legislation to punish China for its alleged currency manipulation, blamed here for lost US jobs.
Schumer had been asked whether US lawmakers should back off efforts to pile pressure on China over the yuan because of Beijing's apparent readiness to drop its opposition to new sanctions on Iran over Tehran's suspect nuclear program.
"To me it shouldn't, because to me, I mean, Iran is very, very important, but so are American jobs and American wealth, and because China manipulates its currency, we lose jobs, wealth flows out of the country daily," he said.
Asked about the timing of possible Senate action on his legislative proposal, Schumer replied: "We'd like to move quickly, we're fed up. And you know, talks, we've been through those."
"Every time there's pressure, the Chinese then sit down and talk, the Chinese government sits down and talks, and comes up with either nothing or very little," Schumer told reporters.
International critics say that China keeps the rate of its yuan artificially low against other foreign currencies to boost exports.
But China defends its exchange rate policy as necessary for the survival of Chinese manufacturers and to support jobs growth.
Speculation mounted last week that China was preparing to alter its exchange rate policy and allow for the yuan to appreciate, after US Treasury Secretary Timothy Geithner made a hastily arranged visit to Beijing.
Facing election-year pressure over unemployment, US lawmakers had been pushing the US Treasury to label Beijing a "currency manipulator" -- a move that would open the door to sanctions by Washington.
But the Treasury announced the delay of a report that was due in mid-April and which could have slapped China with the "manipulator" tag, with Geithner saying there were better ways to advance US interests.
China made its currency a little flexible in 2005 following US pressure, but when the global financial crisis erupted in 2008, it re-pegged the yuan to the US dollar to prop up Chinese exports and revive the economy.
Between 2005 and 2008, China allowed the yuan to appreciate by about 20 percent against the dollar. Some experts however say the Chinese currency is now undervalued by up to 40 percent.
Source: AFP American Edition
